REG - Hellenic Telecomms - Q4 and FY2023 Financial Results
22/02/2024 15:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240222:nRSV1618Ea&default-theme=true
RNS Number : 1618E Hellenic Telecomms Organization S A 22 February 2024
OTE GROUP REPORTS 2023 FOURTH QUARTER AND FULL-YEAR RESULTS
2023 Full Year Highlights
· Growth accelerating at year end - Greece Revenues up 1.1% & Adj.
EBITDA (AL) up 1.2%
· Strong Free Cash Flow generation, at €501mn in line with target -
Adj. Capex at €621mn
· EPS up 42%
· Proposed 5% rise in 2024 total return to shareholders, to €450mn
o Dividend of €0.71 per share, up 23%
o €153mn share buyback program
Fourth Quarter Highlights
· A quarter of strong performances, driven by both Greece and Romania
o Group Revenues up 5.1%, Adj. EBITDA (AL) up 2.8%
· Solid rebound in Greece: Sharp Revenue growth, up 5%, Adj. EBITDA
(AL) up 1.6%
o Positive momentum in Fixed, Broadband, TV, Mobile, and ICT
· Positive trends in operational KPIs
o FTTH 1.33mn homes passed, record additions +35k, 19.5% utilization
(€ mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Revenues 930.2 885.4 +5.1% 3,468.9 3,455.3 +0.4%
Adjusted EBITDA (AL) 341.1 331.8 +2.8% 1,342.5 1,348.0 -0.4%
36.7% 37.5% -0.8pp 38.7% 39.0% -0.3pp
margin %
Operating profit before financial and investing activities 178.5 51.0 - 715.7 590.5 +21.2%
Profit to owners of the parent 134.5 (7.8) - 531.7 388.6 +36.8%
Adj. Profit to owners of the parent 140.8 116.6 +20.8% 562.7 540.7 +4.1%
EPS (€) 0.3223 (0.0185) - 1.2556 0.8873 +41.5%
Adjusted Capex 191.5 199.4 -4.0% 621.4 638.3 -2.6%
Adjusted Free Cash Flow (AL) 116.1 152.6 -23.9% 543.5 654.2 -16.9%
Free Cash Flow (AL) 104.1 137.8 -24.5% 501.2 597.1 -16.1%
Cash and cash equivalents 463.9 590.1 -21.4% 463.9 590.1 -21.4%
Net Debt 634.8 726.7 -12.6% 634.8 726.7 -12.6%
Note: The purpose and calculations of all 'Adjusted' data are detailed in the
Alternative Performance Measures Sectio (#APM) n (#APM)
Message from the Chairman & CEO, Michael Tsamaz:
"We ended 2023 with a quarter of solid operating and financial performances,
rewarding the determination and consistency with which we have met new
competitive challenges throughout the year. In Q4, positive trends were
evident, as revenues from fixed operations returned to growth following steady
improvements throughout the year, mobile revenues rose again, highlighting the
resilience of our mobile network, and Greece revenues overall were up 5%. In
line with our winning strategy, we consistently expand and upgrade our
state-of-the-art fixed and mobile networks, securing our growth and
profitability for the coming years. We are ready to attract and satisfy
growing demand for data communications with the country's most robust fiber
and 5G infrastructure.
"Confident that OTE will maintain its lead and that we will continue
strengthening our performance, we are proposing to raise our total shareholder
remuneration, to €450mn or approximately 95% of free cash flow in 2024, and
to raise our dividend by 23%."
Outlook
In 2024, OTE expects to further improve its operational and financial
performances. Ongoing economic growth driving demand for core retail
offerings, ARPU-enhancing initiatives, and cost-savings should continue to
generate positive momentum. While expecting to face headwinds in various
areas, notably legacy services and certain cost items, OTE is confident that
it will deliver further growth in 2024, based on current market dynamics.
In 2023, OTE has strengthened its leadership in its retail offering and
widened its advance with regard to the quality and deployment of its
infrastructure. The Group intends to continue leveraging these attributes to
strengthen its operating and financial performances in 2024-it will pursue its
investment strategy, with particular focus on its FTTH infrastructure, 5G
network, and digitalization of all customer touchpoints, while continuing to
grow in adjacent services.
In Greece, OTE implemented several initiatives in late 2023 aimed at enhancing
the value of its proposition, supporting future growth in mobile revenues, and
stabilizing its fixed retail business. In addition, OTE's ICT segment, which
acts as one of the major Systems Integrators for businesses and the public
sector in Greece and the EU, should continue benefiting from the ongoing
deployment of the EU Recovery and Resilience Fund.
As a result, in 2024, despite some pressures on local wholesale revenues, OTE
expects to continue growing its revenue base. In addition, OTE will pursue
cost-efficiency initiatives, notably with reference to personnel expenses, in
order to partly offset the impact of higher energy costs. OTE has contracted a
large part of its energy supplies for 2024, raising visibility over future
spending, although at higher prices compared to its previous contract. For
full year 2024, OTE expects further growth in operating profit, albeit at a
slower pace than revenue.
OTE expects to generate Free Cash Flow (FCF) of approximately €470mn in
2024, mainly reflecting higher cash income tax payments compared to 2023, when
it had benefited from an income tax refund. In 2024, the Group expects CAPEX
in the range of €610mn to €620mn, as it pursues the deployment of its FTTH
infrastructure.
2024 Shareholder Remuneration
OTE intends to distribute approximately 95% of its expected 2024 Free Cash
Flow, up from payout ratios of 85% and 84% in 2023 and 2022, respectively.
Total shareholder remuneration is targeted at approximately €450mn,
corresponding to a proposed €297mn cash dividend and approximately €153mn
in share buyback. The proposed dividend per share stands at €0.71 per share,
up 23% compared to 2023. The dividend will be paid out to shareholders on July
10, 2024, following approval of the Annual General Meeting of Shareholders to
be held on June 28, 2024.
OTE's Consolidated Revenues were up 5.1% in Q4'23 to €930.2mn. In Greece,
Revenues were up 5.0% to €854.8mn, benefiting from solid performances in
Mobile, TV, Broadband, and ICT, while in Romania, revenues were up 6.2% at
€77.5mn, mainly supported by a positive contribution from ICT in the
quarter.
Total Group Operating Expenses, excluding depreciation, amortization,
impairment, and charges related to restructuring costs (primarily voluntary
leave schemes), amounted to €571.7mn in Q4'23, up 6.7% compared to Q4'22,
primarily reflecting higher direct costs, associated with higher revenues.
Group Adjusted EBITDA (AL) was up 2.8% at €341.1mn, resulting in a margin of 36.7%. In Greece, Adjusted EBITDA (AL) increased by 1.6% to €337.0mn, yielding a margin of 39.4%, while Romania Mobile operations recorded an Adjusted EBITDA (AL) of €4.1mn in the quarter. The 80-basis-point decline in Group Adjusted EBITDA (AL) margin primarily reflects change in revenue mix, notably a lower revenue contribution from local wholesale business.
Adjusted Capex amounted to €191.5mn, down 4.0% from Q4'22. Capex in Greece
and Romania stood at €181.1mn and €10.4mn, respectively.
Group Adjusted Free Cash Flow (AL) reached €116.1mn in Q4'23, down 23.9%
year-on-year, while reported Free Cash Flow (AL) stood at €104.1mn, down
24.5% versus Q4'22 despite higher profitability, mainly due to higher income
tax payments during the quarter.
Full-year Capex and Free Cash Flow are in line with prior guidance.
The Group's Net Debt stood at €634.8mn as of December 31, 2023, down 12.6%
compared to December 31, 2022. The Group's ratio of Net Debt to 12-month
Adjusted EBITDA (AL) stood at 0.5x. The Group does not face any bond maturity
until September 2026 (€500mn 0.875% Notes).
Revenues (€mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Greece 854.8 813.9 +5.0% 3,189.4 3,155.4 +1.1%
Romania mobile 77.5 73.0 +6.2% 286.9 306.4 -6.4%
(2.1) (1.5) +40.0% (7.4) (6.5) +13.8%
Eliminations
OTE GROUP 930.2 885.4 +5.1% 3,468.9 3,455.3 +0.4%
Adjusted EBITDA (AL) (€mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Greece 337.0 331.8 +1.6% 1,325.5 1,310.0 +1.2%
39.4% 40.8% -1.4pp 41.6% 41.5% +0.1pp
margin (%)
Romania mobile 4.1 0.0 - 17.0 38.0 -55.3%
5.3% 0.0% +5.3pp 5.9% 12.4% -6.5pp
margin (%)
OTE GROUP 341.1 331.8 +2.8% 1,342.5 1,348.0 -0.4%
36.7% 37.5% -0.8pp 38.7% 39.0% -0.3pp
margin (%)
GREECE
OPERATIONAL HIGHLIGHTS
KPIs Q4'23 Q4'22 y-o-y y-o-y Q4'23 Net Adds
% diff.
Fixed line access 2,692,630 2,701,453 -0.3% (8,823) 1,923
Broadband subscribers 2,358,524 2,318,241 +1.7% 40,283 12,608
1,546,399 1,448,224 +6.8% 98,175 20,521
Total Fiber (FTTx)
250,557 137,240 +82.6% 113,317 34,847
FTTH
TV subscribers 678,301 642,687 +5.5% 35,614 13,040
Mobile Subscribers 7,168,214 7,370,105 -2.7% (201,891) (197,289)
3,129,401 2,949,844 +6.1% 179,557 43,375
Postpaid
4,038,813 4,420,261 -8.6% (381,448) (240,664)
Prepaid
Fixed Segment
Throughout 2023, OTE successfully defended and further expanded its customer
base. Its total broadband base rose by 1.7% year-on-year, while broadband
penetration on total fixed lines rose to 88%, from 86% one year earlier,
supported by attractive offering and ongoing customer upgrades. In Q4'23
ΟΤΕ posted another quarter of positive broadband additions, at 13k,
capturing the bulk of estimated market net adds, and reaching a total base of
2,359k at year end.
In 2023, OTE recorded solid operational KPIs in its fiber service, achieving a
6.8% year-on-year increase in the total number of fiber (FTTx) subscribers, to
a total of 1,546k, while FTTx penetration on the broadband base was up
slightly, at 65.6%. Fiber additions in the quarter stood at 21k, as OTE
continues to enhance customer service, expand its fiber network, and upgrade
its offering. Speeds of 100Μbps or higher continue to gain traction, reaching
47% of total FTTx connections.
Consistent with its strategy, OTE remains focused on FTTH deployment, further
expanding its FTTH footprint to an additional 183k homes passed during the
quarter, for a total of 420k additional homes passed in 2023. OTE's total FTTH
footprint reached 1,331k homes passed at year end, and the Company now plans
to reach approximately 1.8 million by the end of 2024. This includes
Ultra-Fast Broadband Infrastructure (UFBB) investment to bring ultra-high
Internet speeds of up to 1Gbps in semi-urban and rural areas of the country.
OTE remains far and away the largest fiber network provider in Greece, having
installed over 80% of the country's total active FTTH lines. Offering the
best-in-class infrastructure in the country, OTE is attracting the bulk of
FTTH connections and protecting its base. OTE posted a record quarter of FTTH
additions, at 35K, driving the total number of subscribers to 251k.Total
utilization on homes passed by OTE's infrastructure amounted to 19.5%, up
compared to 15.8% one year earlier, reflecting active sales effort and
enhanced network availability. FTTH penetration among OTE customers on homes
passed already exceeds 30%. On account of the lower churn and operating costs
associated with fiber networks, success in expanding the FTTH subscriber base
is critical, setting the foundation for sustainable growth.
In 2023, OTE further expanded its TV subscriber base to 678k, a 5.5%
year-on-year increase. In Q4'23, OTE posted another quarter of positive net
additions, at 13k, as the Company leverages its streaming platform and
attractive content portfolio. OTE will continue to leverage its enriched
content portfolio, notably sports and enhanced films and series, benefiting
from higher customer engagement.
Mobile Segment
OTE achieved another year of growth in its mobile postpaid customer base,
totaling more than 3.1mn subscribers, a 6.1% year-on-year increase. This
represents the seventh consecutive year of postpaid base expansion, supported
by ongoing new customer additions as well as prepaid-to-postpaid upgrades. Net
additions were also positive in the quarter, at 43k. Ongoing growth in the
postpaid segment is driven by the Company's competitive advantage in terms of
customer excellence and network superiority. The Company recorded 241k net
disconnections in its pre-paid base, mainly as a result of the clean-up in
inactive base in the quarter and migrations to postpaid.
The Company continues to enjoy a strong competitive advantage in customer
satisfaction and network performance surveys. During 2023, the company's
mobile network was recognized as "the Fastest Mobile Network in Greece" at the
Speedtest Awards(TM) by Ookla(®) for the seventh consecutive year and won
"Best in Test" by "umlaut" for the ninth time in a row. Recent Ookla(® )
results relative to mobile speeds confirmed OTE's network superiority for
the second half of 2023. Recognition of Cosmote's network quality, supported
by ongoing investments, drives positive customer preferences and revenue
growth.
OTE continues to expand its 5G network coverage, exceeding the 2023 year-end
target of 90%, confirming its position as a clear front-runner in 5G roll-out,
while aiming for further growth in 2024. 5G population coverage has already
reached 97% in Athens and Thessaloniki, while 68 other cities enjoy coverage
of over 95%, with speeds exceeding 1Gbps in certain areas. The Company has
completed the upgrade of its 5G network infrastructure to 5G Stand-Alone (SA),
which will provide higher download and upload speeds, ultra-low latency,
improved indoor coverage and even greater reliability of communications. 5G SA
is expected to be commercially available in the first months of 2024. OTE
continues to promote data consumption over its networks with the average data
usage per month reaching 12.6GB in the quarter, compared to 9.5GB a year ago.
OTE leverages the growth of data consumption alongside its network superiority
to strengthen its revenue base.
OTE's clear mobile network leadership is yielding solid growth in subscriber
numbers as well as in mobile service revenue.
FINANCIAL HIGHLIGHTS
(€mn) Q4'23 Q4'22 +/- % 12M'23 12M'22 +/- %
Revenues 854.8 813.9 5.0% 3,189.4 3,155.4 1.1%
Retail Fixed Services 230.1 227.3 +1.2% 915.1 933.4 -2.0%
Including Data Com. 253.8 248.7 +2.1% 1,007.4 1,021.6 -1.4%
Mobile Service Revenues 249.0 239.3 +4.1% 1,009.0 986.4 +2.3%
Wholesale Services 156.7 150.1 +4.4% 572.5 590.3 -3.0%
Other Revenues 219.0 197.2 +11.1% 692.8 645.3 +7.4%
Adjusted EBITDA (AL) 337.0 331.8 +1.6% 1,325.5 1,310.0 +1.2%
margin (%) 39.4% 40.8% -1.4pp 41.6% 41.5% +0.1pp
Total revenues from Greek operations amounted to €854.8mn in the quarter,
recording strong growth, up 5.0% year on year. Revenues from retail fixed
services, mobile services, and ICT were all up in the quarter.
Retail fixed service revenues were up 1.2% in the quarter, or up 2.1%
including data communications services. This marks a recovery in trends
following more than a year of contraction and extends the trend of steady
improvements achieved since Q2 2023. Ιt partly reflects a more favorable
comparison base due to transition from traditional voice services to IP
solutions in late 2022. For its part, broadband performance was once again
positive in the quarter, while TV operations delivered solid revenue growth.
OTE is taking initiatives to defend its topline as it monetizes its extensive
fiber network with ongoing migration to higher broadband speeds.
Mobile service revenues were up 4.1% in the quarter, further extending the
strong momentum of recent quarters. Both postpaid and prepaid revenues were up
in the quarter, reflecting several recently implemented initiatives, as well
as the ongoing successful execution of OTE's more-for-more strategy and
customer transition to higher-value services. Excluding lower visitor roaming
revenues, attributable in full to price discounts provided to operators,
mobile service revenues would be up 4.6%. Visitor roaming revenues were down
by nearly €3mn in the full year to a total of €52mn.
Wholesale revenues increased by 4.4% in Q4'23, mainly reflecting the increase
of international transit traffic revenues in the quarter, offsetting the
continuing drop in national wholesale, reflecting the infrastructure built by
other operators. This changing wholesale revenue mix is impacting overall
EBITDA margin.
Other revenues were up 11.1% in the quarter, mainly reflecting positive ICT
momentum and growth in handset sales. ICT revenues were up 8.4% in Q4'23, a
healthy recovery following a temporary pause in the previous quarter due to
national elections. The Company continues to leverage its experience and
capabilities in network infrastructure, along with innovative and customized
IT and cloud solutions. The most recent projects include collaboration with
Microsoft, offering advanced cloud solutions and services.
Total Adjusted EBITDA (AL) in Greece rose 1.6% in the quarter to €337.0mn,
yielding a margin of 39.4%. Higher contribution of lower-margin revenue
streams in the quarter, along with a temporary increase in certain cost areas,
notably in personnel, resulted in a 1.4pp margin contraction. On a full year
basis, Greek operations recorded a strong margin of 41.6% on higher revenues
and significant cost efficiencies.
ROMANIA MOBILE
KPIs Q4'23 Q4'22 y-o-y y-o-y Q4'23 Net Adds
% diff.
Mobile Subscribers 3,798,434 4,165,629 -8.8% (367,195) (100,661)
1,915,939 1,854,272 +3.3% 61,667 32,987
Postpaid
1,882,495 2,311,357 -18.6% (428,862) (133,648)
Prepaid
(€mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Revenues 77.5 73.0 6.2% 286.9 306.4 -6.4%
Mobile Service Revenues 43.3 48.9 -11.5% 185.0 203.0 -8.9%
Other Revenues 34.2 24.1 +41.9% 101.9 103.4 -1.5%
Adjusted EBITDA (AL) 4.1 0.0 - 17.0 38.0 -55.3%
margin (%) 5.3% 0.0% +5.3pp 5.9% 12.4% -6.5pp
Total revenues from Telekom Romania Mobile (TKRM) amounted to €77.5mn in the
quarter, up 6.2% year on year, mainly reflecting the sharp increase in other
revenues due to revenue recognition of ICT project in the quarter, which will
drop out in coming quarters, as the company is gradually exiting this
business. Excluding the impact from ICT, revenues would be slightly down, a
significant improvement from recent trends. Romania operations continue to be
impacted by mobile termination rate (MTR) cuts, and an additional 50%
reduction has been in place since the beginning of 2024.
Consistent with the prior four years, TKRM achieved another year of growth in
its mobile postpaid base, reaching 1.9mn subscribers, a 3.3% year on year
increase. Net additions in the quarter stood at 33k, setting the framework for
future revenue improvements. The performance of the prepaid segment was
affected by certain campaigns implemented in 2022.
Adjusted EBITDA (AL) stood at €4.1mn in the quarter, compared to breakeven
in Q4'22, impacted by certain adjustments. On a full-year basis, TKRM recorded
Adjusted EBITDA (AL) of €17.0mn, compared to €38.0mn in 2022, mainly due
to higher energy costs, the discontinuation of MVNO, and the impact of certain
customer-retention activities.
SIGNIFICANT EVENTS OF THE QUARTER
Merger of COSMOTE within OTE
On July 13, 2023, the Boards of Directors of OTE and COSMOTE decided the
initiation of the merger procedure through absorption of OTE's 100% subsidiary
"COSMOTE - MOBILE TELECOMMUNICATIONS SINGLE MEMBER SOCIETE ANONYME"
("COSMOTE"). The board of Directors of OTE, at its October 12, 2023, meeting,
approved the terms and conditions of this Draft Merger Agreement. The process
was completed on January 2, 2024. The absorption is not expected to have any
impact on Group consolidated financials as COSMOTE was fully consolidated in
Group Financial Statements.
Cancellation of Own Shares
The Extraordinary General Shareholders' Meeting of November 30, 2023, approved
the cancellation of 8,245,534 own shares, acquired during the period from May
1, 2023, to October 31, 2023, at an average price of €13.99 per share. These
shares were canceled and delisted from the Athens Stock Exchange (ATHEX) on
December 19, 2023, following completion of formalities.
During the period between November 1, 2023, and November 30, 2023, where the
purchases were completed, 1,926,507 own shares were acquired, at an average
execution price of €13.04 per share, with the aim to be cancelled.
New Share Buyback Program (SBB)
The Extraordinary General Shareholders' Meeting of November 30, 2023, approved
a new two-year own-share Buyback Program in the context of the Shareholders'
Remuneration Policy and in partial execution thereof, covering up to 10% of
the Company's share capital, at a price range between €1.0 and €30.0 per
share (hereafter the 2024-2026 Program). The SBB Program will be valid for a
24-month period (February 22, 2024, to February 22, 2026), with the aim to
cancel the shares acquired.
Potential Disposal of TKRM
On November 21, 2023, in response to a request from the Hellenic Capital
Market Commission, OTE announced the potential disposal of its 100% subsidiary
Telekom Romania Mobile (TKRM). In recent years, OTE has consistently strived
to improve TKRM's performance while also exploring strategic options, to
secure its long-term growth.
In this context, OTE has been negotiating with Quantum Projects Group,
controlled by Mr. Adrian Tomșa, the owner of the major Romanian media group
Clever Media, regarding the latter's interest in acquiring TKRM. The parties
have signed a Memorandum of Understanding, in order to facilitate this process
and have filed for approval with the competent Romanian authorities.
In conformity with all applicable legislation and regulation, the Company will
make further announcements if and when necessary.
CEO Transition
On December 14, 2023, OTE announced that Mr. Michael Tsamaz, Chief Executive
Officer and Chairman of the OTE Board of Directors, has decided to leave the
company at the end of June 2024, upon the expiration of his existing contract.
The Board of Directors of OTE, during its meeting held on December 14, 2023,
unanimously decided, in accordance with the relevant proposal of its
Remuneration and Nomination Committee, to recommend to the Annual General
Shareholders Meeting of OTE S.A. the election of Mr. Kostas Nebis, in order
for him to be appointed as Chairman and Chief Executive Officer, effective
July 1, 2024, and approved the terms of his contract. The BoD expressed its
confidence that Mr. Kostas Nebis will continue the further growth of the OTE
Group. More details related to the announcement can be found in the following
link:
https://www.cosmote.gr/otegroup_company/investor_relations/newsroom/en/2023/CEO_OTE_EN.pdf
(https://www.cosmote.gr/otegroup_company/investor_relations/newsroom/en/2023/CEO_OTE_EN.pdf)
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 22, 2024
5:00pm (EET), 3:00pm (GMT), 4:00pm (CET), 10:00am (EST)
Dial-in
Details
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.
Live Webcast Details
The conference call will be webcast and you may join by linking at:
https://87399.themediaframe.eu/links/otegroup240222.html
(https://87399.themediaframe.eu/links/otegroup231110.html)
If you experience difficulty, please call + 30 210 9460803.
Investor Relations 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 (mailto: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:
I. Alternative Performance Measures "APMs"
II. Consolidated Statement of Financial Position as of
December 31, 2023 and December 31, 2022
III. Consolidated Income Statement for the quarter and full year
ended December 31, 2023 and comparative 2022
IV. Consolidated Statement of Cash Flows for the quarter and full
year ended December 31, 2023 and comparative 2022
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.
OTE Group (€ mn) 31/12/2023 31/12/2022
Long-term borrowings 847.7 881.5
Short-term portion of long-term borrowings - 23.1
Short-term borrowings - 150.0
Lease liabilities (long-term portion) 184.9 182.1
Lease liabilities (short-term portion) 60.8 76.1
Financial liabilities related to digital wallets 5.3 4.0
Cash and cash equivalents (463.9) (590.1)
Net Debt 634.8 726.7
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 and other restructuring costs.
· 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.
Q4'23 (€ mn) OTE Group Greece Romania
Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 Q4'22
Revenues 930.2 885.4 854.8 813.9 77.5 73.0
Other Operating Income 1.1 3.1 1.6 1.7 (0.3) 1.4
Total Operating Expenses (before Depreciation, amortization and impairment) (579.6) (545.2) (512.0) (477.8) (69.9) (68.9)
EBITDA 351.7 343.3 344.4 337.8 7.3 5.5
Costs related to voluntary leave schemes 4.8 4.2 3.7 4.2 1.1 -
Other restructuring costs 3.1 5.2 3.1 5.2 - -
Adjusted EBITDA 359.6 352.7 351.2 347.2 8.4 5.5
Depreciation of lessee use rights to leased assets (15.9) (18.7) (12.4) (13.8) (3.5) (4.9)
Interest expense on leases (2.6) (2.2) (1.8) (1.6) (0.8) (0.6)
Adjusted EBITDA (AL) 341.1 331.8 337.0 331.8 4.1 0.0
margin % 36.7% 37.5% 39.4% 40.8% 5.3% 0.0%
12M'23 (€ mn) OTE Group Greece Romania
12M'23 12M'22 12M'23 12M'22 12M'23 12M'22
Revenues 3,468.9 3,455.3 3,189.4 3,155.4 286.9 306.4
Other Operating Income 9.7 10.5 7.1 7.8 2.8 2.7
Total Operating Expenses (before Depreciation, amortization and impairment) (2,096.4) (2,080.2) (1,851.0) (1,836.8) (253.0) (249.9)
EBITDA 1,382.2 1,385.6 1,345.5 1,326.4 36.7 59.2
Costs related to voluntary leave schemes 35.3 39.4 33.8 38.7 1.5 0.7
Other restructuring costs 3.9 5.7 3.1 5.2 0.8 0.5
Adjusted EBITDA 1,421.4 1,430.7 1,382.4 1,370.3 39.0 60.4
Depreciation of lessee use rights to leased assets (69.7) (74.0) (49.9) (53.5) (19.8) (20.5)
Interest expense on leases (9.2) (8.7) (7.0) (6.8) (2.2) (1.9)
Adjusted EBITDA (AL) 1,342.5 1,348.0 1,325.5 1,310.0 17.0 38.0
margin % 38.7% 39.0% 41.6% 41.5% 5.9% 12.4%
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.
OTE Group (€ mn) Q4'23 Q4'22 12M'23 12M'22
Purchase of property plant and equipment and intangible assets - Capex (191.5) (199.4) (621.4) (639.5)
Spectrum Payments - - - 1.2
Adjusted CAPEX (191.5) (199.4) (621.4) (638.3)
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.
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 (€ mn) Q4'23 Q4'22 12M'23 12M'22
Net cash flows from operating activities 313.6 359.2 1,195.1 1,317.2
Purchase of property, plant, equipment and intangible assets (191.5) (199.4) (621.4) (639.5)
Interest received 3.2 1.0 10.4 2.7
Free Cash Flow 125.3 160.8 584.1 680.4
Lease repayments (21.2) (23.0) (82.9) (83.3)
Free Cash Flow After Lease (AL) 104.1 137.8 501.2 597.1
Payment for voluntary leave schemes 11.2 9.6 39.9 45.6
Payment for other restructuring costs 0.8 5.2 2.4 10.3
Spectrum payments - - - 1.2
Adjusted FCF After Lease (AL) 116.1 152.6 543.5 654.2
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 2023 and the comparable period of
2022, the impact of the following items were taken into account: costs related
to voluntary leave schemes, other restructuring costs, (gains)/losses related
to disposal of subsidiaries, net impact from impairments and write offs.
OTE Group (€ mn) - After Tax impact Q4'23 Q4'22 12M'23 12M'22
Profit to owners of the Parent 134.5 (7.8) 531.7 388.6
Costs related to voluntary leave schemes 4.0 3.3 27.9 30.8
Other restructuring costs 2.4 5.2 3.2 5.6
(Gains)/Losses related to disposal of subsidiaries (0.1) - (0.1) (0.2)
Net Impact from Impairments and Write offs - 115.9 - 115.9
Adjusted Profit to owners of the parent 140.8 116.6 562.7 540.7
II. ΟΤΕ GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ mn) 31/12/2023 31/12/2022
ASSETS
Non - current assets
Property, plant and equipment 2,188.3 2,081.1
Right-of-use assets 258.4 266.6
Goodwill 376.6 376.6
Telecommunication licenses 264.0 296.1
Other intangible assets 263.1 335.1
Investments 0.1 0.1
Loans to pension funds 60.7 64.7
Deferred tax assets 185.0 178.2
Contract costs 28.7 30.2
Other non-current assets 77.3 75.3
Total non - current assets 3,702.2 3,704.0
Current assets
Inventories 58.9 54.0
Trade receivables 537.6 471.2
Other financial assets 5.6 4.8
Contract assets 63.9 49.6
Other current assets 103.7 84.1
Restricted cash 0.6 1.8
Cash and cash equivalents 463.9 590.1
Total current assets 1,234.2 1,255.6
TOTAL ASSETS 4,936.4 4,959.6
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,182.9 1,227.3
Share premium 422.8 438.9
Treasury shares (25.3) (73.5)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (148.2) (138.8)
Retained earnings 70.4 (46.2)
Total equity attributable to owners of the Parent 1,943.3 1,848.4
Non-controlling interests 0.5 0.5
Total equity 1,943.8 1,848.9
Non-current liabilities
Long-term borrowings 847.7 881.5
Provision for staff retirement indemnities 107.0 96.7
Provision for youth account 75.9 86.1
Contract liabilities 84.9 40.8
Lease liabilities 184.9 182.1
Deferred tax liabilities 0.4 0.4
Other non - current liabilities 43.0 55.7
Total non - current liabilities 1,343.8 1,343.3
Current liabilities
Trade accounts payable 866.4 874.0
Short-term borrowings - 150.0
Short-term portion of long-term borrowings - 23.1
Income tax payable 95.2 92.3
Contract liabilities 223.9 136.1
Lease liabilities 60.8 76.1
Dividends payable 2.5 2.4
Other current liabilities 400.0 413.4
Total current liabilities 1,648.8 1,767.4
TOTAL EQUITY AND LIABILITIES 4,936.4 4,959.6
III. OTE GROUP CONSOLIDATED INCOME STATEMENT
(€ mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Fixed business:
Retail services revenues 230.1 227.3 1.2% 915.1 933.4 -2.0%
Wholesale services revenues 156.6 150.1 4.3% 572.3 590.2 -3.0%
Other revenues 125.9 112.1 12.3% 373.9 342.6 9.1%
Total revenues from fixed business 512.6 489.5 4.7% 1,861.3 1,866.2 -0.3%
Mobile business:
Service revenues 292.3 288.2 1.4% 1,193.5 1,189.0 0.4%
Handset revenues 93.2 80.5 15.8% 300.2 283.8 5.8%
Other revenues 5.4 5.4 0.0% 17.4 29.6 -41.2%
Total revenues from mobile business 390.9 374.1 4.5% 1,511.1 1,502.4 0.6%
Miscellaneous other revenues 26.7 21.8 22.5% 96.5 86.7 11.3%
Total revenues 930.2 885.4 5.1% 3,468.9 3,455.3 0.4%
Other operating income 1.1 3.1 -64.5% 9.7 10.5 -7.6%
Operating expenses
Interconnection and roaming costs (127.3) (114.1) 11.6% (442.9) (452.7) -2.2%
Provision for expected credit losses (9.2) (9.0) 2.2% (37.9) (48.0) -21.0%
Personnel costs (99.4) (99.5) -0.1% (421.0) (442.3) -4.8%
Costs related to voluntary leave schemes (4.8) (4.2) 14.3% (35.3) (39.4) -10.4%
Commission costs (25.0) (23.8) 5.0% (90.2) (82.6) 9.2%
Merchandise costs (127.8) (108.3) 18.0% (377.9) (358.7) 5.4%
Maintenance and repairs (18.6) (20.7) -10.1% (80.6) (82.2) -1.9%
Marketing (20.5) (21.2) -3.3% (74.3) (69.9) 6.3%
Other operating expenses (147.0) (144.4) 1.8% (536.3) (504.4) 6.3%
Total operating expenses before depreciation, amortization and impairment (579.6) (545.2) 6.3% (2,096.4) (2,080.2) 0.8%
Operating profit before financial and investing activities, depreciation, 351.7 343.3 2.4% 1,382.2 1,385.6 -0.2%
amortization and impairment
Depreciation, amortization and impairment (173.2) (292.3) -40.7% (666.5) (795.1) -16.2%
Operating profit before financial and investing activities 178.5 51.0 - 715.7 590.5 21.2%
Income and expense from financial and investing activities
Finance income and costs (2.3) (13.8) -83.3% (20.2) (37.2) -45.7%
Foreign exchange differences, net 0.5 (4.0) - 3.1 1.6 93.8%
Gains / (losses) from investments and other financial assets - Impairment 0.5 0.2 150.0% 0.9 - -
Total loss from financial and investing activities (1.3) (17.6) -92.6% (16.2) (35.6) -54.5%
Profit before tax 177.2 33.4 - 699.5 554.9 26.1%
Income tax (42.7) (41.3) 3.4% (167.8) (166.2) 1.0%
Profit for the period 134.5 (7.9) - 531.7 388.7 36.8%
Attributable to:
Owners of the parent 134.5 (7.8) - 531.7 388.6 36.8%
Non-controlling interests - (0.1) - - 0.1 -
IV. GROUP CONSOLIDATED STATEMENT OF CASH FLOW
(€ mn) Q4'23 Q4'22 y-o-y 12M'23 12M'22 y-o-y
Cash flows from operating activities
Profit before tax 177.2 33.4 - 699.5 554.9 +26.1%
Adjustments for:
Depreciation, amortization and impairment 173.2 292.3 -40.7% 666.5 795.1 -16.2%
Costs related to voluntary leave schemes 4.8 4.2 +14.3% 35.3 39.4 -10.4%
Provision for staff retirement indemnities 1.7 0.9 +88.9% 4.8 3.9 +23.1%
Provision for youth account - (1.8) - (2.4) (0.9) +166.7%
Foreign exchange differences, net (0.5) 4.0 -112.5% (3.1) (1.6) +93.8%
(Gains) / losses from investments and other financial assets- Impairment (0.5) (0.2) +150.0% (0.9) - -
Finance costs, net 2.3 13.8 -83.3% 20.2 37.2 -45.7%
Working capital adjustments: 63.4 58.9 +7.6% 23.0 48.3 -52.4%
Decrease / (increase) in inventories (7.8) (6.9) +13.0% (4.9) (16.0) -69.4%
Decrease / (increase) in receivables (24.7) 49.2 -150.2% (99.3) 18.7 -
(Decrease) / increase in liabilities (except borrowings) 95.9 16.6 - 127.2 45.6 +178.9%
Payment for voluntary leave schemes (11.2) (9.6) +16.7% (39.9) (45.6) -12.5%
Payment of staff retirement indemnities and youth account, net of employees' (2.2) (2.4) -8.3% (8.8) (9.2) -4.3%
contributions
Interest and related expenses paid (except leases) (3.1) (1.7) +82.4% (20.1) (24.9) -19.3%
Interest paid for leases (2.6) (2.2) +18.2% (9.2) (8.7) +5.7%
Income tax paid (88.9) (30.4) +192.4% (169.8) (70.7) +140.2%
Net cash flows from operating activities 313.6 359.2 -12.7% 1,195.1 1,317.2 -9.3%
Cash flows from investing activities
Sale or maturity of financial assets 0.1 - - 0.1 0.7 -85.7%
Purchase of financial assets - - - (0.8) (0.6) +33.3%
Payments related to disposal of subsidiaries/investments (0.1) (0.5) -80.0% (0.3) (8.3) -96.4%
Cash and cash equivalents of subsidiaries disposed - - - - (0.7) -
Repayment of loans receivable 1.8 1.2 +50.0% 7.2 7.2 0.0%
Purchase of property, plant and equipment and intangible assets (191.5) (199.4) -4.0% (621.4) (639.5) -2.8%
Movement in restricted cash - (0.1) - - - -
Interest received 3.2 1.0 - 10.4 2.7 -
Net cash flows used in investing activities (186.5) (197.8) -5.7% (604.8) (638.5) -5.3%
Cash flows from financing activities
Acquisition of treasury shares (48.0) (78.2) -38.6% (177.0) (293.6) -39.7%
Subsidiary's share capital reduction to minority shareholders - - - - (0.8) -
Expenses related to subsidiary's share capital increase (0.1) - - (0.1) (0.1) 0.0%
Proceeds from loans - - - 80.0 300.0 -73.3%
Repayment of loans (114.6) - - (287.7) (397.7) -27.7%
Lease repayments (21.2) (23.0) -7.8% (82.9) (83.3) -0.5%
Financial liabilities related to digital wallets 2.0 4.0 -50.0% 1.3 4.0 -67.5%
Dividends paid to Company's owners - - - (249.9) (249.9) 0.0%
Net cash flows used in financing activities (181.9) (97.2) +87.1% (716.3) (721.4) -0.7%
Net increase/ (decrease) in cash & cash equivalents (54.8) 64.2 -185.4% (126.0) (42.7) +195.1%
Cash and cash equivalents, at the beginning of the period 519.1 523.7 -0.9% 590.1 630.7 -6.4%
Net foreign exchange differences (0.4) 2.2 -118.2% (0.2) 2.1 -109.5%
Cash and cash equivalents, at the end of the period 463.9 590.1 -21.4% 463.9 590.1 -21.4%
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR TTMATMTMTBMIRecent news on Hellenic Telecommunications Organization SA
See all newsREG - Hellenic Telecomms - Purchase of Own Shares
AnnouncementREG - Hellenic Telecomms - Purchase of Own Shares
AnnouncementREG - Hellenic Telecomms - Purchase of Own Shares
AnnouncementREG - Hellenic Telecomms - Purchase of Own Shares
AnnouncementREG - Hellenic Telecomms - Release date of Q1 2024 Financial Results
Announcement