Hellenic Telecomms - Financial Results Q2/2023
03/08/2023 08:55
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RNS Number : 2076I Hellenic Telecomms Organization S A 03 August 2023
OTE GROUP REPORTS 2023 SECOND QUARTER RESULTS
Highlights
· Further growth in Greek operations
o Revenues up 2.4%, Adj. EBITDA (AL) up 0.9%, margin at 40.9%
o Continuing increase in Mobile Service Revenues, up 2.4%, driven by both
postpaid and prepaid - Improving Fixed Broadband trends
o Positive momentum in operational KPIs-Fiber (FTTx) subscribers up 7%,
reaching 65% penetration; FTTH subscriber base up 28k; FTTH footprint growing
at 1.1mn homes passed, utilization reaching 19%
· Total Group Revenues up 1.1%; Adj. Group EBITDA (AL) impacted by
Romanian operations
(€ mn) Q2'23 Q2'22 Change 6M'23 6M'22 Change
Revenues 854.1 844.8 +1.1% 1,657.7 1,665.1 -0.4%
Adjusted EBITDA (AL) 326.8 332.8 -1.8% 648.8 658.1 -1.4%
Margin % 38.3% 39.4% -1.1pp 39.1% 39.5% -0.4pp
Operating profit before financial and investing activities 151.2 150.5 +0.5% 332.4 329.7 +0.8%
Profit to owners of the parent 111.9 106.8 +4.8% 247.2 236.2 +4.7%
Basic EPS (€) 0.2687 0.2423 +10.9% 0.5786 0.5337 +8.4%
Adjusted Capex 166.7 167.8 -0.7% 246.6 260.8 -5.4%
Adjusted Free Cash Flow (AL) 147.9 159.9 -7.5% 376.7 387.7 -2.8%
Free Cash Flow (AL) 144.0 157.2 -8.4% 370.1 379.0 -2.3%
Cash and cash equivalents 821.1 1,001.1 -18.0% 821.1 1,001.1 -18.0%
Net Debt 390.6 537.4 -27.3% 390.6 537.4 -27.3%
Note: The purpose and calculations of all 'Adjusted' data are detailed in the
Alternative Performance Measures Section (#APM)
ATHENS, Greece - August 3, 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 second quarter of 2023.
Message from the Chairman & CEO, Michael Tsamaz:
"We pursued our trajectory of steady progress with positive momentum in the
second quarter. OTE achieved significant performance improvements in the Greek
market, which, as we had expected, witnessed increased competitive pressures.
Another solid increase in mobile service revenues offset the drop in fixed
resulting from customer-retention initiatives. Our fiber deployment is on
track, and we are pleased with FTTH subscriber takeup, nearly double the
penetration level reached one year ago, on a much larger base.
"In a more supportive macroeconomic environment, we expect similar trends to
continue in the second half of the year. We will maintain strict cost
discipline to sustain our profitability and deliver on our commitments."
Outlook
In a challenging competitive environment, OTE expects to defend its market
position and continue benefiting from its ongoing investment in advanced
network infrastructure in fixed and mobile. Customer excellence, best-in-class
services, and brand recognition, evidenced by all major market surveys,
continue to support OTE's solid financial performance in its home market. OTE
intends to pursue its investment strategy, focusing on the deployment of FTTH
and 5G. OTE anticipates further growing its ICT business, acting as one of the
major Systems Integrator for businesses and the public sector in Greece and
the EU, supported by ongoing deployment of the Recovery and Resilience Plan.
OTE remains committed to continuously enhancing its efficiency and
streamlining its cost base, to support its profitability.
In Greece, OTE expects to maintain current trends in the second half of the
year, supported by positive revenue trends in key segments and lower costs in
certain categories. Group operations should remain impacted by challenging
conditions in Romania.
For full year 2023, OTE management reiterates its Free Cash Flow guidance of
approximately €500mn, reflecting higher income tax payments compared to
2022, lower financial expenses, stable Capex, and improvement in operating
performance in Greece. 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 €250mn cash dividend and a share buyback program of
approximately €175mn. Final dividend of €0.58878 per share was paid out on
July 11, 2023. As of today, the Company has disbursed nearly half of its total
2023 share buyback program.
OTE GROUP HIGHLIGHTS
OTE's Consolidated Revenues were up 1.1% in Q2'23 to €854.1mn. In Greece,
Revenues were up 2.4% to €786.6mn, as lower retail fixed services were more
than offset by continuing strong performances in Mobile and ICT. In Romania,
revenues were down 11.4% at €69.3mn, impacted, as in Q1, by termination of
the MVNO offering to FMC customers phased out in the second half of 2022,
certain customer-retention promotions, and mobile termination rate (MTR) cuts.
Total Operating Expenses, excluding depreciation, amortization, impairment,
and charges related to restructuring costs (primarily voluntary leave
schemes), amounted to €507.3mn in Q2'23, up 2.9% compared to Q2'22, as the
increase in direct costs, associated with higher revenues, offset savings
achieved in other cost areas, notably personnel costs.
Group Adjusted EBITDA (AL) was down 1.8% at €326.8mn, resulting in a margin of 38.3%. In Greece, Adjusted EBITDA (AL) rose by 0.9% to €322.0mn, yielding a margin of 40.9%. Romania Mobile operations recorded an Adjusted EBITDA (AL) of €4.8mn, down €8.9mn, reflecting the impact of MVNO service termination, the effect of higher energy costs following the discontinuation of the Romanian state price cap since the beginning of 2023, as well as certain adjustments in operating expenses last year.
Adjusted Capex amounted to €166.7mn, down 0.7% from Q2'22. Excluding
TV-related Capex, particularly high in Q2'22 due to the acquisition of Greek
football broadcasting rights, Adjusted Capex would be up 15.6%. Capex in
Greece and Romania stood at €157.9mn and €8.8mn, respectively.
Group Adjusted Free Cash Flow (AL) reached €147.9mn in Q2'23, down 7.5%
year-on-year, while reported Free Cash Flow (AL) stood at €144.0mn, down
8.4% versus Q2'22, mainly reflecting lower EBITDA in Romania.
The Group's Net Debt stood at €390.6mn as of June 30, 2023, down 27.3%
compared to 2022. The Group's ratio of Net Debt to 12-month Adjusted EBITDA
(AL) stood at 0.3x. The rating agency Standard & Poor's recently raised
OTE's long-term rating to "BBB+" with stable outlook.
Revenues (€mn) Q2'23 Q2'22 Change 6M'23 6M'22 Change
Greece 786.6 768.3 +2.4% 1,522.8 1,511.5 +0.7%
Romania mobile 69.3 78.2 -11.4% 138.3 156.6 -11.7%
Eliminations (1.8) (1.7) +5.9% (3.4) (3.0) +13.3%
OTE GROUP 854.1 844.8 +1.1% 1,657.7 1,665.1 -0.4%
Adjusted EBITDA After Lease (AL) (€mn) Q2'23 Q2'22 Change 6M'23 6M'22 Change
Greece 322.0 319.1 +0.9% 640.5 632.7 +1.2%
Margin (%) 40.9% 41.5% -0.6pp 42.1% 41.9% +0.2pp
Romania mobile 4.8 13.7 -65.0% 8.3 25.4 -67.3%
Margin (%) 6.9% 17.5% -10.6pp 6.0% 16.2% -10.2pp
OTE GROUP 326.8 332.8 -1.8% 648.8 658.1 -1.4%
Margin (%) 38.3% 39.4% -1.1pp 39.1% 39.5% -0.4pp
GREECE
Operational Highlights
Q2'23 Q2'22 y-o-y change y-o-y Q2'23
diff net adds
Fixed line access 2,698,609 2,714,096 -0.6% (15,487) (2,706)
Broadband subscribers 2,342,376 2,287,003 +2.4% 55,373 9,002
…of which Fiber service 1,514,904 1,415,406 +7.0% 99,498 25,497
……of which FTTH 193,588 92,254 +109.8% 101,334 27,765
TV subscribers 647,897 641,578 +1.0% 6,319 (634)
Mobile Subscribers 7,373,414 7,322,423 +0.7% 50,991 28,175
Postpaid 3,051,235 2,898,529 +5.3% 152,706 54,000
Prepaid 4,322,179 4,423,894 -2.3% (101,715) (25,825)
Fixed Segment
OTE extended its positive performance in the broadband market, continuing to
capture the bulk of total broadband market net additions, posting 9k net
additions in the quarter, raising the total number of broadband subscribers to
2,342k. Broadband penetration on its total fixed lines further expanded to
87%, up from 84% a year earlier.
Consistent with its strategy, OTE upgrades its offering to subscribers on an
ongoing basis through its expanding fiber network. OTE recorded another
quarter of year-on-year increase in total fiber subscribers, up 7.0%, with 25k
net additions in the quarter. The total number of fiber (FTTx) subscribers
stood at 1,515k, while FTTx penetration on the total broadband base further
expanded to 64.7%. The share of subscribers using broadband speeds of 100Μbps
or higher has now reached 46% of all FTTx connections.
The Company remains focused on its FTTH investment plan-having installed more
than 80% of the country's total FTTH lines, it passed nearly 1.1 million homes
at the end of June 2023, and plans to reach approximately 1.4 million homes by
year end. OTE posted another quarter of strong additions, at 28K, with the
total number of FTTH subscribers reaching 194k. Total utilization on homes
passed by OTE's infrastructure increased, reaching 19%, compared to 14% one
year earlier, reflecting enhanced network availability and effective sales
initiatives. Offering and marketing the best-in-class available infrastructure
in the country, OTE is succeeding in attracting the majority of customers and
protecting its base.
OTE's TV subscriber base reached 648k in the second quarter of 2023, an
increase of 1.0% compared to mid-2022, despite competitive challenges and the
persistence of piracy. Managing to steadily expand its customer base, backed
by premium content, has been key in OTE's strategy.
Mobile Segment
OTE further extended the positive trends of prior quarters, achieving
year-on-year growth of 5.3% in its postpaid subscriber base. Its total mobile
customer base reached 7.4mn, up 0.7%, at the end of the quarter. Ongoing
customer growth is driven by the Company's competitive advantage in terms of
customer loyalty and network superiority. The Company continues to enjoy a
strong competitive position in customer satisfaction and network performance
surveys. Cosmote's mobile network was once again recognized as "the Fastest
Mobile Network in Greece" at the Speedtest Awards(TM) by Ookla(®). Cosmote
subscribers enjoy average download speeds more than double those of competing
offers. 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, now exceeding 85% of the
total population, rapidly approaching its 2023 year-end target of 90%. 5G
coverage has already reached 97% in Athens, while Thessaloniki and 37 other
cities enjoy coverage of 90%, with speeds exceeding 1Gbps in certain areas.
While continuing to promote data usage over its superior 4G/4G+/5G network,
OTE leverages the growth of data consumption, and its network superiority to
strengthen its revenue base.
These attributes have been driving OTE's continuing strong performance in both
subscriber numbers and revenues, particularly in the higher ARPU market
segments.
New Businesses
The new mobile wallet application, payzy, continues to steadily gain traction
in the e-transaction and mobile payment service market, with the total number
of users now reaching 135k.
Financial highlights
(€ mn) Q2'23 Q2'22 Change 6M'23 6M'22 Change
Revenues 786.6 768.3 +2.4% 1,522.8 1,511.5 +0.7%
Retail Fixed Services 227.6 236.3 -3.7% 456.8 475.9 -4.0%
…Including Data Com. 250.7 258.2 -2.9% 501.1 517.7 -3.2%
Mobile Service Revenues 248.3 242.5 +2.4% 483.9 471.8 +2.6%
Wholesale Services 149.0 145.8 +2.2% 273.7 289.5 -5.5%
Other Revenues 161.7 143.7 +12.5% 308.4 274.3 +12.4%
Adjusted EBITDA (AL) 322.0 319.1 +0.9% 640.5 632.7 +1.2%
margin (%) 40.9% 41.5% -0.6pp 42.1% 41.9% +0.2pp
Total revenues from Greek operations increased by 2.4% in the quarter to
€786.6mn, as strong mobile and ICT performances offset the drop in retail
fixed services.
Retail fixed service revenues decreased by 3.7%, mainly due to lower legacy
voice revenues. Including revenues from data communications services, retail
fixed revenues were down 2.9%, an improvement compared to the trends of recent
quarters, as OTE is gradually absorbing the impact of certain market
pressures. In broadband, though revenue growth was affected by speed upgrades
implemented in 2022 to enhance customer loyalty and bolstering OTE's
competitive strengths, trends are gradually improving.
Mobile service revenues posted another quarter of solid increase, up 2.4%.
Growth in mobile reflects positive performances in both the postpaid and
prepaid segments, as a result of the successful execution of OTE's
more-for-more strategy, and ongoing efforts to shift customers to higher-value
services. Visitor roaming revenues were up 13% in the quarter.
Wholesale revenues were up 2.2% in Q2, reflecting higher revenues from
low-margin international transit traffic, while revenues from other wholesale
streams, generally yielding higher EBITDA margins, decreased by approximately
4%.
Other revenues were up 12.5% in the quarter, on strong ICT momentum. Revenues
from system solutions were up 26.9%, as the Company leverages its experience
and capabilities in network infrastructure, along with innovative and
customized IT and cloud solutions.
Total Adjusted EBITDA (AL) in Greece rose 0.9% in the quarter to €322.0mn,
yielding a margin of 40.9%, supported by successful cost-containment efforts
in several areas. Personnel costs were down 10%, primarily reflecting the
Voluntary Leave scheme implemented in 2022, as well as certain one-off savings
related to its 2023 collective labor agreement. Energy costs also declined in
the quarter. OTE extended for one year, 2024, its energy-supply agreement and
is working to hedge a significant portion of its energy costs for the coming
years. The Company also reduced bad-debt provisioning, consistent with the
trends observed in 2022.
ROMANIA MOBILE
Operational Data Q2'23 Q2'22 y-o-y change y-o-y Q2'23
diff net adds
Mobile Subscribers 4,063,395 3,940,571 +3.1% 122,824 941
Postpaid 1,863,583 1,786,909 +4.3% 76,674 6,255
Prepaid 2,199,812 2,153,662 +2.1% 46,150 (5,314)
(€ mn) Q2'23 Q2'22 Change 6M'23 6M'22 Change
Revenues 69.3 78.2 -11.4% 138.3 156.6 -11.7%
Mobile Service Revenues 46.3 50.5 -8.3% 94.1 102.9 -8.6%
Other Revenues 23.0 27.7 -17.0% 44.2 53.7 -17.7%
Adjusted EBITDA (AL) 4.8 13.7 -65.0% 8.3 25.4 -67.3%
margin (%) 6.9% 17.5% -10.6pp 6.0% 16.2% -10.2pp
Total revenues from Telekom Romania Mobile amounted to €69.3mn in the
quarter, down 11.4% year on year, mainly reflecting the loss of the
contribution from MVNO services to FMC customers and the impact from mobile
termination rate (MTR) cuts. Revenues from Romanian operations have also been
impacted by certain customer-retention activities in the form of handset
subsidies.
Consistent with prior quarters, the total subscriber base continued to grow in
the quarter, with postpaid subscribers up 4.3% and prepaid up 2.1%, setting
the framework for future improvements.
Adjusted EBITDA (AL) stood at €4.8mn in the quarter, down €8.9mn compared
to Q2'22, partly reflecting the MVNO impact, higher energy costs of about
€2mn, due to the government's removal of the cap on energy prices, and
certain adjustments in operating expenses last year.
SIGNIFICANT EVENTS OF THE QUARTER
Dividend
On June 7, 2023, the Annual General Meeting of Shareholders approved the
distribution of a dividend of a total amount of €250mn or €0.5765 per
outstanding share. The final dividend of €0.58878 adjusted for own shares
outstanding as of the ex-dividend date, was paid out on July 11, 2023.
Share Buyback Program
Since March 2023, OTE has been executing a share buyback program, as part of
its 2023 Shareholder Remuneration Policy. The targeted buyback amount, during
the period March 1, 2023, to January 19, 2024, is approximately €175
million, including expenses. During the second quarter of 2023, the Company
acquired 2,765,512 own shares at an average price of €13.95 per share, while
as of June 30, 2023, the Company held a total 9,040,594 own shares, (including
the shares cancelled in July).
The Annual Shareholders General Meeting of June 7, 2023, approved the
cancellation of 7,417,049 own shares. These shares had been purchased between
October 3, 2022, and April 30, 2023, at an average price of €14.69 per
share. Following the completion of publicity formalities, were canceled, and
delisted from the Athens Stock Exchange effective July 18, 2023.
Repayment of Notes under the Global Medium-Term Note (GMTN) Programme of OTE
PLC
On June 8, 2023, OTE PLC fully repaid at maturity the €150.0mn fixed-rate
Notes under the Global Medium-Term Note Program of OTE PLC.
Issuance of new bond
On June 20, 2023, OTE PLC issued a €80mn bond due October 2023, with a yield
of 3.701% per annum, fully subscribed by Deutsche Telekom AG. The proceeds
were used for the partial refinancing of the €150mn OTE PLC bond that
matured on June 8, 2023.
SUBSEQUENT EVENTS
Standard & Poor's upgrades OTE to "BBB+" with stable outlook
On July 19, 2023, the rating agency Standard & Poor's raised OTE's
long-term rating from BBB to BBB+ with stable outlook. According to the rating
agency, OTE's upgrade follows i) the recent upgrade of OTE's parent Deutsche
Telekom to BBB+ and ii) OTE's robust financial metrics, including solid
balance sheet and resilient cash flow generation. In addition, the Hellenic
Republic's recent outlook revision to positive and the confirmation of its BB+
rating underscore the ongoing improvements in OTE's economic environment.
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 absorption is not expected to have any impact on Group
consolidated financials as COSMOTE is fully consolidated in Group Financial
Statements. The process is expected to be completed in January 2024.
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, August 3, 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/otegroup230803.html
(https://87399.themediaframe.eu/links/otegroup230803.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 Statement of Financial Position as of June 30, 2023
and December 31, 2022
III. Consolidated Income Statement for the quarter and six months
ended June 30, 2023 and comparative 2022
IV. Group Revenues for the quarter and six months ended June 30, 2023
and comparative 2022
V. Consolidated Statement of Cash Flows for the quarter and six
months ended June 30, 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 from
2019 onwards.
OTE Group (€ mn) 30/06/2023 30/06/2022
Long-term borrowings 870.4 742.6
Short-term portion of long-term borrowings 23.1 397.6
Short-term borrowings 80.0 150.0
Lease liabilities (long-term portion) 171.7 177.6
Lease liabilities (short-term portion) 63.5 70.7
Financial liabilities related to wallets 3.0 0.0
Cash and cash equivalents (821.1) (1,001.1)
Net Debt 390.6 537.4
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
Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22
Revenues 854.1 844.8 786.6 768.3 69.3 78.2
Other Operating Income 2.3 1.6 1.3 1.5 1.0 0.1
Total Operating Expenses (ex-Depreciation, amortization and impairment) (534.1) (526.0) (478.1) (468.1) (57.8) (59.6)
EBITDA 322.3 320.4 309.8 301.7 12.5 18.7
margin % 37.7% 37.9% 39.4% 39.3% 18.0% 23.9%
Costs related to voluntary leave schemes 26 32.6 25.6 32.5 0.4 0.1
Other restructuring costs 0.8 0.4 - - 0.8 0.4
Adjusted EBITDA 349.1 353.4 335.4 334.2 13.7 19.2
margin % 40.9% 41.8% 42.6% 43.5% 19.8% 24.6%
Depreciation of lessee use rights to leased assets (20.1) (18.4) (11.8) (13.4) (8.3) (5.0)
Interest expense on leases (2.2) (2.2) (1.6) (1.7) (0.6) (0.5)
Adjusted EBITDA (AL) 326.8 332.8 322.0 319.1 4.8 13.7
margin % 38.3% 39.4% 40.9% 41.5% 6.9% 17.5%
6Months (€ mn) OTE GROUP GREECE ROMANIA
6M'23 6M'22 6M'23 6M'22 6M'23 6M'22
Revenues 1,657.7 1,665.1 1,522.8 1,511.5 138.3 156.6
Other Operating Income 4.2 6.7 2.9 5.8 1.3 0.9
Total Operating Expenses (ex-Depreciation, amortization and impairment) (997.7) (1,005.3) (882.7) (886.9) (118.4) (121.4)
EBITDA 664.2 666.5 643.0 630.4 21.2 36.1
margin % 40.1% 40.0% 42.2% 41.7% 15.3% 23.1%
Costs related to voluntary leave schemes 26.6 32.7 26.2 32.5 0.4 0.2
Other restructuring costs 0.8 0.4 - - 0.8 0.4
Adjusted EBITDA 691.6 699.6 669.2 662.9 22.4 36.7
margin % 41.7% 42.0% 43.9% 43.9% 16.2% 23.4%
Depreciation of lessee use rights to leased assets (38.3) (37.1) (25.3) (26.7) (13.0) (10.4)
Interest expense on leases (4.5) (4.4) (3.4) (3.5) (1.1) (0.9)
Adjusted EBITDA (AL) 648.8 658.1 640.5 632.7 8.3 25.4
margin % 39.1% 39.5% 42.1% 41.9% 6.0% 16.2%
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 (€ mn) Q2'23 Q2'22 6M'23 6M'22
Purchase of property plant and equipment and intangible assets - Capex (166.7) (169.0) (246.6) (262.0)
Spectrum Payments - 1.2 - 1.2
Adjusted CAPEX (166.7) (167.8) (246.6) (260.8)
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 (€ mn) Q2'23 Q2'22 6M'23 6M'22
Net cash flows from operating activities 331.2 344.3 654.3 679.8
Purchase of property, plant, equipment & intangible assets (166.7) (169.0) (246.6) (262.0)
Interest received 3.3 0.5 5.3 0.9
Free Cash Flow 167.8 175.8 413.0 418.7
Lease repayments (23.8) (18.6) (42.9) (39.7)
Free Cash Flow After Lease (AL) 144.0 157.2 370.1 379.0
Payment for voluntary leave schemes 2.9 1.0 5.0 2.4
Payment for other restructuring costs 1.0 0.5 1.6 5.1
Spectrum payments - 1.2 - 1.2
Adjusted Free Cash Flow After Lease (AL) 147.9 159.9 376.7 387.7
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, Profit to owners of the parent was impacted by costs related to
voluntary leave schemes and other restructuring costs.
After Tax impact (€ mn) Q2'23 Q2'22 6M'23 6M'22
Profit to owners of the Parent (reported) 111.9 106.8 247.2 236.2
Costs related to voluntary leave schemes 20.3 25.4 20.8 25.5
Other restructuring costs 0.8 0.3 0.8 0.3
Adjusted Profit to owners of the parent 133.0 132.5 268.8 262.0
II. GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Amounts in € mn 30/06/2023 31/12/2022
ASSETS
Non - current assets
Property, plant and equipment 2,135.0 2,081.1
Right-of-use assets 245.0 266.6
Goodwill 376.6 376.6
Telecommunication licenses 280.1 296.1
Other intangible assets 298.2 335.1
Investments 0.1 0.1
Loans to pension funds 62.7 64.7
Deferred tax assets 183.3 178.2
Contract costs 30.6 30.2
Other non-current assets 74.0 75.3
Total non - current assets 3,685.6 3,704.0
Current assets
Inventories 52.8 54.0
Trade receivables 509.6 471.2
Other financial assets 5.5 4.8
Contract assets 57.7 49.6
Other current assets 125.4 123.7
Restricted Cash 1.9 1.8
Cash and cash equivalents 821.1 590.1
Total current assets 1,574.0 1,295.2
TOTAL ASSETS 5,259.6 4,999.2
Amounts in € mn 30/06/2023 31/12/2022
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,227.3 1,227.3
Share premium 439.0 438.9
Treasury shares (132.7) (73.5)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (141.5) (138.8)
Changes in non-controlling interests (3,314.1) (3,314.1)
Retained earnings 3,265.1 3,267.9
Total equity attributable to owners of the Parent 1,783.8 1,848.4
Non-controlling interests 0.5 0.5
Total equity 1,784.3 1,848.9
Non-current liabilities
Long-term borrowings 870.4 881.5
Provision for staff retirement indemnities 91.3 96.7
Provision for youth account 79.4 86.1
Contract liabilities 40.5 40.8
Lease liabilities 171.7 182.1
Deferred tax liabilities 0.3 0.4
Other non - current liabilities 41.4 55.7
Total non - current liabilities 1,295.0 1,343.3
Current liabilities
Trade accounts payable 874.8 874.0
Short-term borrowings 80.0 150.0
Short-term portion of long-term borrowings 23.1 23.1
Income tax payable 187.4 92.3
Contract liabilities 155.8 136.1
Lease liabilities 63.5 76.1
Dividends payable 252.2 2.4
Other current liabilities 543.5 453.0
Total current liabilities 2,180.3 1,807.0
TOTAL EQUITY AND LIABILITIES 5,259.6 4,999.2
III. GROUP CONSOLIDATED INCOME STATEMENT
Amounts in € mn Q2'23 Q2'22 +/- % 6M'23 6M'22 +/- %
Total revenues 854.1 844.8 +1.1% 1,657.7 1,665.1 -0.4%
Other operating income 2.3 1.6 +43.8% 4.2 6.7 -37.3%
Operating expenses
Interconnection and roaming costs (113.4) (109.1) +3.9% (199.8) (214.8) -7.0%
Provision for expected credit losses (9.9) (13.1) -24.4% (18.9) (26.1) -27.6%
Personnel costs (108.3) (119.7) -9.5% (218.1) (232.8) -6.3%
Costs related to voluntary leave schemes (26.0) (32.6) -20.2% (26.6) (32.7) -18.7%
Commission costs (21.8) (20.9) +4.3% (42.8) (40.7) +5.2%
Merchandise costs (78.1) (79.2) -1.4% (157.7) (153.6) +2.7%
Maintenance and repairs (21.1) (18.9) +11.6% (39.3) (39.2) +0.3%
Marketing (16.1) (17.4) -7.5% (30.3) (29.9) +1.3%
Other operating expenses (139.4) (115.1) +21.1% (264.2) (235.5) +12.2%
Total operating expenses before depreciation, amortization and impairment (534.1) (526.0) +1.5% (997.7) (1,005.3) -0.8%
Operating profit before financial and investing activities, depreciation, 322.3 320.4 +0.6% 664.2 666.5 -0.3%
amortization and impairment
Depreciation, amortization and impairment (171.1) (169.9) +0.7% (331.8) (336.8) -1.5%
Operating profit before financial and investing activities 151.2 150.5 +0.5% 332.4 329.7 +0.8%
Income and expense from financial and investing activities
Interest and related expenses (8.6) (8.7) -1.1% (16.5) (16.9) -2.4%
Interest income 3.3 0.5 - 5.3 0.9 -
Foreign exchange differences, net 1.7 2.1 -19.0% 1.9 2.5 -24.0%
Gains / (losses) from investments and other financial assets - Impairment 0.4 (0.3) - 0.6 (0.3) -
Total loss from financial and investing activities (3.2) (6.4) -50.0% (8.7) (13.8) -37.0%
Profit before tax 148.0 144.1 +2.7% 323.7 315.9 +2.5%
Income tax (36.1) (37.3) -3.2% (76.5) (79.6) -3.9%
Profit for the period 111.9 106.8 4.8% 247.2 236.3 +4.6%
Attributable to:
Owners of the parent 111.9 106.8 +4.8% 247.2 236.2 +4.7%
Non-controlling interests - - - - 0.1 -
IV. GROUP REVENUES
Amounts in € mn Q2'23 Q2'22 % 6M'23 6M'22 %
Fixed business:
Retail services revenues 227.6 236.3 -3.7% 456.8 475.9 -4.0%
Wholesale services revenues 148.9 145.9 +2.1% 273.7 289.5 -5.5%
Other revenues 86.1 72.9 +18.1% 160.8 139.7 +15.1%
Total revenues from fixed business 462.6 455.1 +1.6% 891.3 905.1 -1.5%
Mobile business:
Service revenues 294.5 292.8 +0.6% 577.8 574.5 +0.6%
Handset revenues 68.1 66.2 +2.9% 134.1 124.0 +8.1%
Other revenues 4.0 8.4 -52.4% 7.7 19.2 -59.9%
Total revenues from mobile business 366.6 367.4 -0.2% 719.6 717.7 +0.3%
Miscellaneous other revenues 24.9 22.3 +11.7% 46.8 42.3 +10.6%
Total revenues 854.1 844.8 +1.1% 1,657.7 1,665.1 -0.4%
V. GROUP CONSOLIDATED STATEMENT OF CASH FLOW
Amounts in € mn Q2'23 Q2'22 % 6M'23 6M'22 %
Cash flows from operating activities
Profit before tax 148.0 144.1 +2.7% 323.7 315.9 +2.5%
Adjustments for:
Depreciation, amortization and impairment 171.1 169.9 +0.7% 331.8 336.8 -1.5%
Costs related to voluntary leave schemes 26.0 32.6 -20.2% 26.6 32.7 -18.7%
Provision for staff retirement indemnities 0.4 1.0 -60.0% (3.8) 2.0 -
Provision for youth account (2.6) 0.3 - (2.4) 0.6 -
Foreign exchange differences, net (1.7) (2.1) -19.0% (1.9) (2.5) -24.0%
Interest income (3.3) (0.5) - (5.3) (0.9) -
(Gains) / losses from investments and other financial assets- Impairment (0.4) 0.3 - (0.6) 0.3 -
Interest and related expenses 8.6 8.7 -1.1% 16.5 16.9 -2.4%
Working capital adjustments: (1.4) 1.3 - (22.1) (1.8) -
Decrease / (increase) in inventories 6.9 0.2 - 1.2 (7.8) -115.4%
Decrease / (increase) in receivables (37.6) (27.0) +39.3% (47.4) (18.6) +154.8%
(Decrease) / increase in liabilities (except borrowings) 29.3 28.1 +4.3% 24.1 24.6 -2.0%
Payment for voluntary leave schemes (2.9) (1.0) +190.0% (5.0) (2.4) +108.3%
Payment of staff retirement indemnities and youth (2.8) (2.1) +33.3% (4.6) (4.1) +12.2%
account, net of employees' contributions
Interest and related expenses paid (except leases) (4.5) (3.1) +45.2% (8.6) (6.3) +36.5%
Interest paid for leases (2.2) (2.2) 0.0% (4.5) (4.4) +2.3%
Income tax (paid) /received (1.1) (2.9) -62.1% 14.5 (3.0) -
Net cash flows from operating activities 331.2 344.3 -3.8% 654.3 679.8 -3.8%
Cash flows from investing activities
Sale or maturity of financial assets - - - - 0.7 -100.0%
Purchase of financial assets (0.1) (0.3) -66.7% (0.7) (0.4) +75.0%
Payments related to disposal of subsidiaries/ investments - (0.4) -100.0% - (0.4) -100.0%
Repayment of loans receivable 1.8 1.8 0.0% 3.6 3.6 0.0%
Purchase of property, plant and equipment and intangible assets (166.7) (169.0) -1.4% (246.6) (262.0) -5.9%
Movement in restricted cash (0.1) 0.1 - (0.1) 0.1 -
Interest received 3.3 0.5 - 5.3 0.9 -
Net cash flows used in investing activities (161.8) (167.3) -3.3% (238.5) (257.5) -7.4%
Cash flows from financing activities
Acquisition of treasury shares (39.1) (79.6) -50.9% (59.1) (150.7) -60.8%
Proceeds from loans granted and issued 80.0 150.0 -46.7% 80.0 150.0 -46.7%
Repayment of loans (150.0) - - (161.5) (11.5) -
Lease repayments (23.8) (18.6) +28.0% (42.9) (39.7) +8.1%
Financial liabilities related to wallets 0.5 - - (1.0) - -
Dividends paid to Company's owners (0.2) - - (0.2) (0.1) +100.0%
Net cash flows used in financing activities (132.6) 51.8 - (184.7) (52.0) -
Net increase in cash & cash equivalents 36.8 228.8 -83.9% 231.1 370.3 -37.6%
Cash and cash equivalents, at the beginning of the period 784.3 772.3 +1.6% 590.1 630.7 -6.4%
Net foreign exchange differences - - - (0.1) 0.1 -200.0%
Cash and cash equivalents, at the end of the period 821.1 1,001.1 -18.0% 821.1 1,001.1 -18.0%
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