REG - Hellenic Telecomms - 1st Quarter Results
14/05/2024 08:15
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RNS Number : 3214O Hellenic Telecomms Organization S A 14 May 2024
OTE GROUP REPORTS 2024 FIRST QUARTER RESULTS
Highlights
· A solid start to the year: Group Revenues up significantly (+9.2%),
Adj. EBITDA (AL) up 1.2%
· Ongoing positive momentum in Greece: strong topline, up 10.3%, Adj.
EBITDA (AL) up 1.5%
o Further expansion in Retail revenues - Mobile, Broadband and TV all up
o Sharp increase in ICT
· Positive trends in operational KPIs
o FTTH: 1,375k homes passed, record additions +36k, utilization up at 22%
(€ mn) Q1'24 Q1'23 y-o-y
Revenues 877.6 803.6 +9.2%
Adjusted EBITDA (AL) 326.0 322.0 +1.2%
margin % 37.1% 40.1% -3pp
Operating profit before financial and investing activities 182.2 181.2 +0.6%
Profit to owners of the parent 134.8 135.3 -0.4%
Adj. Profit to owners of the parent 142.5 135.8 +4.9%
EPS (€) 0.3242 0.3157 +2.7%
Adjusted Capex 117.5 79.9 +47.1%
Free Cash Flow (AL) 127.1 226.1 -43.8%
Cash and cash equivalents 567.8 784.3 -27.6%
Net Debt 521.0 506.2 +2.9%
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:
"2024 is off to a good start. I am pleased to report solid operating and
financial performances as my tenure nears its conclusion. Revenue growth has
accelerated significantly, driven mainly by our ICT, international wholesale,
and mobile revenues, while we pursued the expansion of our FTTH footprint and
data networks, and grew our EBITDA. Since 2010, when I took over as Chairman
and CEO, we have achieved major breakthroughs and we have weathered a few
major storms. Together, we transformed our organization and built a
sustainable digital services provider. I am proud of OTE's progress over the
years, and of its contribution to the digital transformation of Greece, its
society, and its business environment.
"For the rest of 2024 and the years ahead, under the direction of my
successor, Kostas Nebis, OTE is well placed to continue to grow its brand,
generate significant cash flow, invest in the country's infrastructure, and
provide value to its users, partners, associates, and shareholders."
Outlook
In 2024, barring unforeseen circumstances, OTE expects to further improve its
operational and financial performances. The ARPU-enhancing initiatives
implemented in late 2023 should support mobile revenue growth and the fixed
retail business. OTE should also continue to benefit from the positive
macroeconomic outlook in Greece and the ongoing deployment of the EU Recovery
and Resilience Fund, securing further growth in the ICT segment. This revenue
growth, while driven by lower-margin activities, contributes to the Group's
long-term performance. As a result, OTE expects to continue growing its
revenue base in 2024, despite anticipated pressure on local wholesale revenues
and an overall contraction of the fixed market.
In addition, OTE remains committed to continuously enhancing its efficiency
and pursue cost-saving initiatives, notably in the personnel area. These
should generate positive momentum and partly offset the impact of energy
headwinds following the expiration of its 2023 power supply contract. For full
year 2024, based on current market dynamics, OTE is confident that it will
deliver further growth in operating profit, albeit at a slower pace than
revenue.
OTE is defending its market positions and securing its market share, while
leveraging its significant competitive advance in terms of FTTH
infrastructure, 5G coverage, and network performance to drive ongoing
subscriber additions and upgrades. OTE intends to pursue its investment
strategy, continuing to benefit from its best-in-class networks in fixed and
mobile and its recognized customer excellence. The expansion of its FTTH
infrastructure ensures that OTE captures an increasing share of fixed
broadband subscribers, with increased loyalty. Similarly, the widely
recognized superiority of OTE's 5G network is the main enabler for the
continuing mobile service revenue growth.
2024 Guidance
For full year 2024, OTE management reiterates its Free Cash Flow (FCF)
guidance of approximately €470mn, impacted by higher cash income tax
payments compared to 2023. In 2024, the Group expects CAPEX in the range of
€610mn to €620mn, primarily earmarked for the further deployment of its
FTTH infrastructure.
2024 Shareholder Remuneration
OTE intends to distribute approximately 95% of its expected 2024 Free Cash
Flow. 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, up 23%
compared to 2023. The dividend will be paid out to shareholders on July 10,
2024, subject to approval of the Annual General Meeting of Shareholders to be
held on June 28, 2024. Implementation of the Company's share buyback program,
commenced on February 26, 2024, is currently ongoing.
OTE GROUP HIGHLIGHTS
OTE's Consolidated Revenues in Q1'24 were up 9.2% to €877.6mn, fueled by
sharp growth in Greece. Revenues from Greek operations were up 10.3% to
€812.3mn, benefiting from solid performances in Mobile, TV, Broadband, and
particularly ICT. In Romania, revenues were down 4.1% at €66.2mn, mainly
reflecting the impact of mobile termination rate (MTR) cuts and
customer-retention promotions in prior periods.
Total Group Operating Expenses, excluding depreciation, amortization,
impairment, and charges related to restructuring costs (primarily voluntary
leave schemes), amounted to €532.5mn in Q1'24, up 15.0% compared to Q1'23,
primarily reflecting higher direct costs, associated with higher revenues.
Group Adjusted EBITDA (AL) was up 1.2% at €326.0mn, resulting in a margin of 37.1%. In Greece, Adjusted EBITDA (AL) increased by 1.5% to €323.2mn, yielding a margin of 39.8%, while Romania Mobile operations recorded an Adjusted EBITDA (AL) of €2.8mn in the quarter. The significant contribution from ICT and low-margin international wholesale revenue explains the lower Group Adjusted EBITDA (AL) margin in the quarter.
Adjusted Capex amounted to €117.5mn, up 47.1% from Q1'23, reflecting the
strategic focus on FTTH deployment. Capex timing in 2023 had been skewed
toward the latter part of the year. Capex in Greece and Romania stood at
€106.4mn and €11.1mn, respectively, in Q1'24.
Free Cash Flow (AL) stood at €127.1mn, down 43.8% versus Q1'23 despite
higher profitability, mainly due to higher income tax payments and higher
capex payments during the quarter. The company remains on track to deliver its
full year Free Cash Flow target. Tax outflows in the comparable period of 2023
had benefited from an income tax refund.
The Group's Net Debt stood at €521.0mn as of March 31, 2024, down 17.9%
compared to December 31, 2023. The Group's ratio of Net Debt to 12-month
Adjusted EBITDA (AL) stood at 0.4x. The Group does not face any bond maturity
until September 2026 (€500mn 0.875% Notes).
Revenues (€mn) Q1'24 Q1'23 y-o-y
Greece 812.3 736.2 +10.3%
Romania mobile 66.2 69.0 -4.1%
Eliminations (0.9) (1.6) -43.8%
OTE GROUP 877.6 803.6 +9.2%
Adjusted EBITDA (AL) (€mn) Q1'24 Q1'23 y-o-y
Greece 323.2 318.5 +1.5%
margin (%) 39.8% 43.3% -3.5pp
Romania mobile 2.8 3.5 -20.0%
margin (%) 4.2% 5.1% -0.9pp
OTE GROUP 326.0 322.0 +1.2%
margin (%) 37.1% 40.1% -3pp
GREECE
OPERATIONAL HIGHLIGHTS
KPIs Q1'24 Q1'23 y-o-y y-o-y Q1'24 Net Adds
% diff.
Fixed line access 2,686,440 2,701,315 -0.6% (14,875) (6,190)
Broadband subscribers 2,358,980 2,333,374 +1.1% 25,606 456
1,565,013 1,489,407 +5.1% 75,606 18,614
Total Fiber (FTTx)
286,791 165,823 +73.0% 120,968 36,234
FTTH
TV subscribers 687,691 648,531 +6.0% 39,160 9,390
Mobile Subscribers 7,157,250 7,345,239 -2.6% (187,989) (10,964)
3,186,683 2,997,235 +6.3% 189,448 57,282
Postpaid
3,970,567 4,348,004 -8.7% (377,437) (68,246)
Prepaid
Fixed Segment
OTE has successfully preserved its share of the Greek fixed-line market in the
past two years, even as certain legacy voice-only fixed lines and services
face disconnection. In the first quarter of 2024, OTE made further progress in
broadband. Its attractive broadband offering and customer upgrades led to
another increase in total subscribers, to 2,359k, up 1.1% year-on-year, while
broadband penetration on total fixed lines rose to 88%, from 86% one year
earlier.
OTE continues to expand its fiber network, enhance customer service, and
upgrade its offering. As a result, the total number of its fiber (FTTx)
subscribers increased by 5.1% year-on-year, with 19k net additions in the
quarter. The total number of fiber (FTTx) subscribers stood at 1,565k, while
FTTx penetration on the total broadband base stood at 66.3% up from 63.8% a
year earlier. Speeds of 100Μbps or higher continue to gain traction, reaching
48% of total FTTx connections.
The Company plans to speed up FTTH deployment to reach approximately 1.8mn
homes by the end of 2024. This includes the partly subsidized 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. As of March 31,
2024, OTE's FTTH network had reached 1,375k homes. OTE remains far and away
the largest fiber network provider in Greece, having installed over 80% of the
country's total active FTTH lines. As a result, OTE continues to attract the
bulk of FTTH connections. It posted another record quarter of additions in its
FTTH subscriber base, at 36k, raising the total number of FTTH subscribers to
287k. OTE recently launched even higher speeds, up to 10 Gbps, implementing a
pilot project in certain areas of the Attica region around Athens.
Total utilization on homes passed by OTE's infrastructure amounted to 22%, up
from 18% one year earlier, reflecting active sales effort and enhanced network
availability. FTTH penetration among OTE customers on own homes passed already
reached 35%. On account of significantly lower churn of FTTH service, enhanced
customer satisfaction and operating costs associated with fiber networks,
success in expanding the FTTH subscriber base is critical, setting the
foundation for long-term sustainable growth.
OTE's TV subscriber base reached 688k in the first quarter of 2024, a
year-on-year increase of 6.0%. In Q1'24, OTE posted another quarter of
positive net additions, at 9k, as the Company leverages its streaming platform
and attractive content portfolio. In 2024, OTE renewed for another three years
its rights to broadcast UEFA football competitions. The award of the premium
content of UEFA League (Champions League, Europa league and Conference League)
broadcast rights for the upcoming seasons 2024-2027 strengthens Cosmote TV's
competitive positioning with highly popular content.
Mobile Segment
Consistent with its strategy, OTE continues to expand its postpaid customer
base. OTE's clear mobile network leadership and its competitive advantage in
terms of customer excellence is yielding solid growth in subscriber numbers.
OTE achieved a 6.3% year-on-year increase in its postpaid customer base,
reaching a total of 3.2mn subscribers. Net postpaid additions were also
positive in the quarter, at 57k, supported by ongoing customer additions and
prepaid-to-postpaid upgrades.
OTE continues to expand its 5G network coverage, confirming its position as a
clear front-runner in 5G roll-out. 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 become commercially available shortly. OTE continues to promote
data consumption over its networks with the average data usage per month
reaching 12.0GB in the quarter, up sharply from 8.7GB a year earlier. OTE
leverages the growth of data consumption alongside its network superiority to
strengthen its revenue base.
FINANCIAL HIGHLIGHTS
(€mn) Q1'24 Q1'23 +/- %
Revenues 812.3 736.2 +10.3%
Retail Fixed Services 229.1 229.2 0.0%
...Including Data Com. 251.6 250.4 +0.5%
Mobile Service Revenues 243.3 235.6 +3.3%
Wholesale Services 149.0 124.7 +19.5%
Other Revenues 190.9 146.7 +30.1%
Adjusted EBITDA (AL) 323.2 318.5 +1.5%
margin (%) 39.8% 43.3% -3.5pp
Total revenues from Greek operations posted a sharp increase of 10.3% in the
quarter, to €812.3mn. Topline growth reflects the positive momentum of
retail service revenues supported by strong mobile operations while
lower-margin ICT and international wholesale revenues were up significantly in
the quarter. Broadband revenues continue to grow while TV revenues further
expanded in the quarter, mainly supported by customer ongoing acquisitions.
Retail fixed service revenues, including data communications, were up 0.5% in
the quarter, underscoring the steady improvement in underlying trends. Solid
Broadband performance and healthy TV operations were offset by contracting
legacy services. OTE is defending its topline with ongoing migrations to
higher broadband speeds, taking advantage of the fast rollout of its FTTH
infrastructure. The expected launch of an FTTH State subsidy coupon should
further support demand and increase utilization.
Mobile service revenues posted another material increase, up 3.3% in the
quarter. Both postpaid and prepaid revenues were up once again in the quarter,
reflecting several initiatives implemented in late 2023, as well as the
successful execution of OTE's more-for-more strategy and customer transition
to higher-value services. The ongoing execution of the successful strategy in
mobile along with strong competitive positions in customer satisfaction and
network performance surveys should support future growth.
Wholesale revenues were up 19.5% in the quarter, mainly reflecting the sharp
increase in international transit traffic revenues in the quarter, offsetting
the ongoing drop in high-margin national wholesale due to the infrastructure
built by other operators.
Other revenues were up 30.1% in the quarter, primarily reflecting strong ICT
momentum. Handset sales were also up in the quarter. ICT revenues posted solid
growth of 56.1%, reflecting strong demand and the postponement of certain
projects last summer in the wake of the Greek legislative elections. The
Company continues to leverage its experience and capabilities in network
infrastructure, along with innovative and customized IT and cloud solutions.
Operating profitability in Greece continues to expand in line with recent
trends. Adjusted EBITDA (AL) rose 1.5% in the quarter to €323.2mn. The solid
increase in mobile revenue along with ongoing cost containment on the
personnel front offset higher energy costs, up about €5mn, and pressure in
the national wholesale segment. Margin contraction to 39.8% reflects the
increasing contribution from lower-margin revenue streams in the quarter.
ROMANIA MOBILE
KPIs Q1'24 Q1'23 y-o-y y-o-y Q1'24 Net Adds
% diff.
Mobile Subscribers 3,660,929 4,062,454 -9.9% (401,525) (137,505)
1,931,662 1,857,328 +4.0% 74,334 15,723
Postpaid
1,729,267 2,205,126 -21.6% (475,859) (153,228)
Prepaid
(€mn) Q1'24 Q1'23 y-o-y
Revenues 66.2 69.0 -4.1%
Mobile Service Revenues 38.9 47.8 -18.6%
Other Revenues 27.3 21.2 +28.8%
Adjusted EBITDA (AL) 2.8 3.5 -20.0%
margin (%) 4.2% 5.1% -0.9pp
Total revenues from Telekom Romania Mobile (TKRM) amounted to €66.2mn in the
quarter, down 4.1% year on year. Mobile service revenues were impacted by
customer-retention promotions in prior periods, while overall operations in
Romania continue to suffer the impact of mobile termination rate (MTR) cuts.
An additional 50% MTR cut has been implemented as of the beginning of 2024.
Other revenues were up in the quarter, mainly reflecting higher handset sales.
Ongoing positive customer additions on the postpaid segment continues, as the
postpaid base achieved a 4% year-on-year increase to a total of 1.9mn
subscribers. Net additions in the quarter stood at 16k, setting the framework
for future revenue improvements. The prepaid segment subscriber base declined
in the quarter, consistent with the trend of overall contraction prevailing in
the Romania prepaid market.
Adjusted EBITDA (AL) stood at €2.8mn in the quarter, down €0.7mn
year-on-year, partly reflecting topline pressure.
SIGNIFICANT EVENTS OF THE QUARTER
Merger of COSMOTE within OTE
Οn January 2, 2024, the process of absorption of wholly owned subsidiary
company COSMOTE - MOBILE TELECOMMUNICATIONS SINGLE MEMBER SOCIETE ANONYME
("COSMOTE") by its parent company OTE, was completed. This does not have any
impact on Group consolidated financials as COSMOTE was fully consolidated in
Group Financial Statements.
Shareholder Remuneration
Following the decision by OTE's Board of Directors on February 21, 2024, OTE
intends to distribute approximately 95% of its expected 2024 Free Cash Flow.
Total shareholder remuneration is targeted at approximately €450mn,
corresponding to a proposed €297mn cash dividend and approximately €153mn
in share buyback. The Board of Directors of OTE will propose to the Company's
Annual General Shareholder Meeting of June 28, 2024, the distribution of a
dividend of €0.71 per share. 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. The share buyback execution started
on February 26, 2024 and is currently in force.
The dividend corresponding to treasury shares owned by the Company until the
ex-dividend date in the context of the Share Buyback Program will increase the
amount of the dividend to be paid to other shareholders.
Share Buyback Program
The Extraordinary General Shareholders' Meeting of November 30, 2023, approved
a new two-year Share Buyback Program in the context of the Shareholders'
Remuneration Policy and in partial execution thereof (hereafter the 2024-2026
Program). The Program execution started on February 26, 2024, and will be
concluded by January 21, 2025. The targeted amount stands at approximately
€153mn.
Morgan Stanley Europe SE will lead-manage, at its own discretion, the Share
Buyback Program during the aforementioned period. Shares will be purchased
exclusively for cancellation following a Shareholder General Meeting
resolution and under the terms of the legal and regulatory framework in force.
During the first quarter of 2024, and notably during the period from February
26, 2024, to March 31, 2024, the Company acquired 1,225,016 shares at an
average price of €13.63 per share. As of March 31, 2024, the Company held a
total 3,151,523 own shares including the remaining 1,926,507 shares acquired
in the context of the previous Share Buyback Program and as of May 13, 2024,
the Company held 4,418,936 own shares in total. The cancellation of the
aforementioned shares will take place following the approval of the Annual
General Shareholder Meeting on June 28, 2024.
Spin-off of mobile telephony towers
On March 11, 2024, OTE announced that, in an effort to enhance its overall
value and dynamics, and following the successful spin-offs of the Customer
Service, Shops and Field Technical Services units, absorbed by COSMOTE E-VALUE
Group, GERMANOS and COSMOTE TECHNICAL SERVICES, it is exploring the spin-off
of its activities related to the passive infrastructure of mobile telephony
towers into a 100% subsidiary. This move aims to better utilize and enhance
the transparency regarding the value of the specific asset. Once completed,
subject to approval by the Company's relevant decision-making bodies, this
process will support the optimization and efficiency of the Group's
operations. The spin-off is not expected to have any impact on the Group's
consolidated financial results.
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
Tuesday, May 14, 2024
13:00pm (EEST), 11:00am (BST), 12:00pm (CEST), 03:00am (EDT)
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/otegroup240514.html
(https://87399.themediaframe.eu/links/otegroup240514.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 statements 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 March
31, 2024 and December 31, 2023
III. Consolidated Income Statement for the quarter ended March
31, 2024 and comparative 2023
IV. Consolidated Statement of Cash Flows for the quarter ended
March 31, 2024 and comparative 2023
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 of the Consolidated Statement of Financial Position
(Exhibit II), Consolidated Income Statement (Exhibit III) and Consolidated
Statement of Cash Flow (Exhibit V) 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) 31/03/2024 31/12/2023
Long-term borrowings 847.9 847.7
Short-term portion of long-term borrowings - -
Short-term borrowings - -
Lease liabilities (long-term portion) 173.5 184.9
Lease liabilities (short-term portion) 62.2 60.8
Financial liabilities related to digital wallets 5.2 5.3
Cash and cash equivalents (567.8) (463.9)
Net Debt 521.0 634.8
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.
Q1'24 (€ mn) OTE Group Greece Romania
Q1'24 Q1'23 Q1'24 Q1'23 Q1'24 Q1'23
Revenues 877.6 803.6 812.3 736.2 66.2 69.0
Other Operating Income 3.6 1.9 3.3 1.6 0.4 0.3
Total Operating Expenses (before Depreciation, amortization and impairment) (542.4) (463.6) (488.6) (404.6) (54.8) (60.6)
EBITDA 338.8 341.9 327.0 333.2 11.8 8.7
Costs related to voluntary leave schemes 9.9 0.6 9.9 0.6 - -
Other restructuring costs - - - - - -
Adjusted EBITDA 348.7 342.5 336.9 333.8 11.8 8.7
Depreciation of lessee use rights to leased assets (19.9) (18.2) (11.9) (13.5) (8.0) (4.7)
Interest expense on leases (2.8) (2.3) (1.8) (1.8) (1.0) (0.5)
Adjusted EBITDA (AL) 326.0 322.0 323.2 318.5 2.8 3.5
margin % 37.1% 40.1% 39.8% 43.3% 4.2% 5.1%
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) Q1'24 Q1'23
Purchase of property plant and equipment and intangible assets - Capex (117.5) (79.9)
Spectrum Payments - -
Adjusted CAPEX (117.5) (79.9)
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) Q1'24 Q1'23
Net cash flows from operating activities 260.2 323.1
Purchase of property, plant, equipment and intangible assets (117.5) (79.9)
Interest received 3.4 2.0
Free Cash Flow 146.1 245.2
Lease repayments (19.0) (19.1)
Free Cash Flow After Lease (AL) 127.1 226.1
Payment for voluntary leave schemes 2.2 2.1
Payment for other restructuring costs 0.7 0.6
Spectrum payments - -
Adjusted FCF After Lease (AL) 130.0 228.8
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 2024 and the comparable period of
2023, Profit to owners of the parent was impacted only by costs related to
voluntary leave schemes.
OTE Group (€ mn) Q1'24 Q1'23
Profit to owners of the Parent 134.8 135.3
Costs related to voluntary leave schemes 7.7 0.5
Adjusted Profit to owners of the parent 142.5 135.8
II. ΟΤΕ GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ mn) 31/03/2024 31/12/2023
ASSETS
Non - current assets
Property, plant and equipment 2,201.9 2,188.3
Right-of-use assets 246.9 258.4
Goodwill 376.6 376.6
Telecommunication licenses 255.9 264.0
Other intangible assets 260.8 263.1
Investments 0.1 0.1
Loans to pension funds 59.7 60.7
Deferred tax assets 187.5 185.0
Contract costs 28.0 28.7
Other non-current assets 78.3 77.3
Total non - current assets 3,695.7 3,702.2
Current assets
Inventories 61.7 58.9
Trade receivables 565.7 537.6
Other financial assets 5.8 5.6
Contract assets 67.6 63.9
Other current assets 120.6 103.7
Restricted cash 0.6 0.6
Cash and cash equivalents 567.8 463.9
Total current assets 1,389.8 1,234.2
TOTAL ASSETS 5,085.5 4,936.4
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,182.9 1,182.9
Share premium 422.9 422.8
Treasury shares (42.0) (25.3)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (149.4) (148.2)
Retained earnings 205.2 70.4
Total equity attributable to owners of the Parent 2,060.3 1,943.3
Non-controlling interests 0.5 0.5
Total equity 2,060.8 1,943.8
Non-current liabilities
Long-term borrowings 847.9 847.7
Provision for staff retirement indemnities 104.6 107.0
Provision for youth account 73.8 75.9
Contract liabilities 86.3 84.9
Lease liabilities 173.5 184.9
Deferred tax liabilities 0.4 0.4
Other non - current liabilities 48.2 43.0
Total non - current liabilities 1,334.7 1,343.8
Current liabilities
Trade accounts payable 859.5 866.4
Income tax payable 84.2 95.2
Contract liabilities 214.0 223.9
Lease liabilities 62.2 60.8
Dividends payable 2.5 2.5
Other current liabilities 467.6 400.0
Total current liabilities 1,690.0 1,648.8
TOTAL EQUITY AND LIABILITIES 5,085.5 4,936.4
III. OTE GROUP CONSOLIDATED INCOME STATEMENT
(€ mn) Q1'24 Q1'23 y-o-y
Fixed business:
Retail services revenues 229.1 229.2 0.0%
Wholesale services revenues 149.0 124.8 +19.4%
Other revenues 112.2 74.7 +50.2%
Total revenues from fixed business 490.3 428.7 +14.4%
Mobile business:
Service revenues 282.1 283.3 -0.4%
Handset revenues 73.4 66.0 +11.2%
Other revenues 4.8 3.7 +29.7%
Total revenues from mobile business 360.3 353.0 +2.1%
Miscellaneous other revenues 27.0 21.9 +23.3%
Total revenues 877.6 803.6 +9.2%
Other operating income 3.6 1.9 +89.5%
Operating expenses
Interconnection and roaming costs (112.3) (89.6) +25.3%
Provision for expected credit losses (8.5) (9.0) -5.6%
Personnel costs (103.6) (109.8) -5.6%
Costs related to voluntary leave schemes (9.9) (0.6) -
Commission costs (23.6) (21.0) +12.4%
Merchandise costs (102.2) (79.6) +28.4%
Maintenance and repairs (20.8) (20.9) -0.5%
Marketing (15.2) (14.2) +7.0%
Other operating expenses (146.3) (118.9) +23.0%
Total operating expenses before depreciation, amortization and impairment (542.4) (463.6) +17.0%
Operating profit before financial and investing activities, depreciation, 338.8 341.9 -0.9%
amortization and impairment
Depreciation, amortization and impairment (156.6) (160.7) -2.6%
Operating profit before financial and investing activities 182.2 181.2 +0.6%
Income and expense from financial and investing activities
Finance income and costs (4.3) (5.9) -27.1%
Foreign exchange differences, net 0.1 0.2 -50.0%
Gains / (losses) from investments and other financial assets - Impairment 0.3 0.2 +50.0%
Total loss from financial and investing activities (3.9) (5.5) -29.1%
Profit before tax 178.3 175.7 +1.5%
Income tax (43.5) (40.4) +7.7%
Profit for the period 134.8 135.3 -0.4%
Attributable to:
Owners of the parent 134.8 135.3 -0.4%
Non-controlling interests 0.0 0.0 -
IV. GROUP CONSOLIDATED STATEMENT OF CASH FLOW
(€ mn) Q1'24 Q1'23 y-o-y
Cash flows from operating activities
Profit before tax 178.3 175.7 +1.5%
Adjustments for:
Depreciation, amortization and impairment 156.6 160.7 -2.6%
Costs related to voluntary leave schemes 9.9 0.6 -
Provision for staff retirement indemnities 0.5 (4.2) -111.9%
Provision for youth account - 0.2 -
Foreign exchange differences, net (0.1) (0.2) -50.0%
(Gains) / losses from investments and other financial assets- Impairment (0.3) (0.2) +50.0%
Finance costs, net 4.3 5.9 -27.1%
Working capital adjustments: (25.4) (20.7) +22.7%
Decrease / (increase) in inventories (2.8) (5.7) -50.9%
Decrease / (increase) in receivables (51.3) (9.8) -
(Decrease) / increase in liabilities (except borrowings) 28.7 (5.2) -
Payment for voluntary leave schemes (2.2) (2.1) +4.8%
Payment of staff retirement indemnities and youth account, net of employees' (1.8) (1.8) 0.0%
contributions
Interest and related expenses paid (except leases) (2.8) (4.1) -31.7%
Interest paid for leases (2.8) (2.3) +21.7%
Income tax (paid)/received (54.0) 15.6 -
Net cash flows from operating activities 260.2 323.1 -19.5%
Cash flows from investing activities
Purchase of financial assets - (0.6) -100.0%
Payments related to disposal of subsidiaries/investments (8.6) - -
Repayment of loans receivable 1.8 1.8 0.0%
Purchase of property, plant and equipment and intangible assets (117.5) (79.9) +47.1%
Interest received 3.4 2.0 +70.0%
Net cash flows used in investing activities (120.9) (76.7) +57.6%
Cash flows from financing activities
Acquisition of treasury shares (16.0) (20.0) -20.0%
Repayment of loans - (11.5) -100.0%
Lease repayments (19.0) (19.1) -0.5%
Financial liabilities related to digital wallets (0.1) (1.5) -93.3%
Net cash flows used in financing activities (35.1) (52.1) -32.6%
Net increase/ (decrease) in cash & cash equivalents 104.2 194.3 -46.4%
Cash and cash equivalents, at the beginning of the period 463.9 590.1 -21.4%
Net foreign exchange differences (0.3) (0.1) +200.0%
Cash and cash equivalents, at the end of the period 567.8 784.3 -27.6%
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