REG - Hellenic Telecomms - 3rd Quarter Results
09/11/2023 08:45
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RNS Number : 9367S Hellenic Telecomms Organization S A 09 November 2023
OTE GROUP REPORTS 2023 THIRD QUARTER RESULTS
· Continuing growth in Greek profitability; Adj. EBITDA (AL) up 0.7%
· Total Revenues in Greece down 2.2% on lower wholesale and timing of
ICT contracts
o Positive trajectory in postpaid and prepaid topline continues; Improving
trends in Fixed Retail Services, Broadband and TV up
o Solid momentum in operational KPIs- FTTH footprint at 1.15mn homes passed,
utilization rate at 19%, total Fiber (FTTx) base up 7%
· Adjusted Group EBITDA (AL) down 1.5%, impacted by Romania; margin up
40bp
(€ mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Revenues 881.0 904.8 -2.6% 2,538.7 2,569.9 -1.2%
Adjusted EBITDA (AL) 352.6 358.1 -1.5% 1,001.4 1,016.2 -1.5%
40.0% 39.6% +0.4pp 39.4% 39.5% -0.1pp
margin %
Operating profit before financial and investing activities 204.8 209.8 -2.4% 537.2 539.5 -0.4%
Profit to owners of the parent 150.0 160.2 -6.4% 397.2 396.4 +0.2%
EPS (€) 0.3553 0.3673 -3.3% 0.9334 0.9000 +3.7%
Adjusted Capex 183.3 178.1 +2.9% 429.9 438.9 -2.1%
Adjusted Free Cash Flow (AL) 50.7 113.9 -55.5% 427.4 501.6 -14.8%
Free Cash Flow (AL) 27.0 80.3 -66.4% 397.1 459.3 -13.5%
Cash and cash equivalents 519.1 523.7 -0.9% 519.1 523.7 -0.9%
Net Debt 671.9 774.2 -13.2% 671.9 774.2 -13.2%
Note: The purpose and calculations of all 'Adjusted' data are detailed in the
Alternative Performance Measures Section (#APM)
Message from the Chairman & CEO, Michael Tsamaz:
"We achieved another solid quarter in Greece, making good progress in the
areas that will sustain our future growth and profitability. In a very
competitive marketplace, we were able to register material subscriber growth
in broadband, TV, and postpaid mobile, leveraging our brand's strong
commitment to superior service across the board. These attributes are a clear
source of optimism. Our FTTH development is also making headway at a steady
pace, in terms of deployment as well as customer additions, and we are hopeful
that new public support will encourage these trends.
"We are sustaining cost-containment efforts across the board, in addition to
our recent early retirement scheme. These initiatives are paying off, and we
are reporting higher Greek EBITDA and a substantial margin. We enter the last
stretch of 2023 in good shape to pursue the implementation of our winning
strategy and prepare for next year."
Outlook
Heightened geopolitical challenges and increasing uncertainties may adversely
impact the macroeconomic environment. In particular, higher interest rates,
inflation and energy price risks may negatively impact consumer spending.
While the competitive environment in Greece remains intense, OTE is defending
its market positions and securing its market share, as it continues to benefit
from its ongoing investment in advanced network infrastructure in both fixed
and mobile. OTE is leveraging its significant advance over its competition in
terms of FTTH rollout, 5G coverage, and network performance to drive ongoing
subscriber additions and upgrades. OTE intends to pursue its investment
strategy, with particular focus on its highly competitive deployment of FTTH
and 5G, and will continue to benefit from its best-in-class networks,
recognized customer excellence, and superior brand attributes. Ongoing takeup
of FTTH services may be further supported by upcoming government subsidy
schemes in the course of 2024. OTE has recently taken several initiatives
aimed at enhancing the value of its proposition, safeguarding its future
growth and solid financial performance in its home market. At the same time
and despite occasional delays as evidenced this quarter, OTE anticipates
continued solid performance from its ICT business. OTE acts as one of the
major Systems Integrators for businesses and the public sector in Greece and
the EU, supported by the ongoing deployment of the EU Recovery and Resilience
Fund.
In Greece, for full year 2023, OTE expects Adjusted EBITDA (AL) growth in line
with the level achieved in the first nine months, supported by cost efficiency
initiatives, such as personnel and lower energy costs. OTE has contracted a
large part of its energy supplies for 2024, raising visibility over future
spending, albeit at higher prices compared to its previous contract. At Group
level, operations should remain impacted by challenging conditions in Romania.
OTE management expects 2023 Free Cash Flow of approximately €500mn while
Group Capex should reach approximately €620mn, a 3% reduction from prior
guidance of €640mn mainly due to timing of TV content payments and minor
delays in FTTH rollout due to challenging weather conditions during the past
months.
Total 2023 Shareholder Remuneration should reach approximately €425mn,
corresponding to a €250mn cash dividend and a share buyback program of
approximately €175mn. The final dividend of €0.58878 per share was paid
out on July 11, 2023. As of the date of this release, the Company has
disbursed 88% of the amount earmarked for its total 2023 share buyback
program.
OTE GROUP HIGHLIGHTS
OTE's Consolidated Revenues were down 2.6% in Q3'23 to €881.0mn. In Greece,
Revenues decreased by 2.2% to €811.8mn, as lower wholesale and a temporary
drop in ICT revenues offset positive performances in Mobile, Broadband and TV.
In Romania, revenues were down 7.4% at €71.1mn, impacted by 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 €515.2mn in Q3'23, down 2.3% compared to Q3'22,
reflecting cost-containment efforts in several areas, notably personnel and
energy costs, and a decrease in direct costs, associated with lower revenues.
Group Adjusted EBITDA (AL) was down 1.5% at €352.6mn, resulting in a margin of 40.0%. In Greece, Adjusted EBITDA (AL) increased by 0.7% to €348.0mn, yielding a strong margin of 42.9%. Romania Mobile operations recorded an Adjusted EBITDA (AL) of €4.6mn, down €8.0mn, mainly reflecting lower revenue as well as the impact of higher energy costs.
Adjusted Capex amounted to €183.3mn, up 2.9% from Q3'22 on ongoing FTTH and
5G rollout. Capex in Greece and Romania stood at €174.8mn and €8.5mn,
respectively.
Group Adjusted Free Cash Flow (AL) reached €50.7mn in Q3'23, down 55.5%
year-on-year, while reported Free Cash Flow (AL) stood at €27.0mn, down
66.4% versus Q3'22, mainly reflecting higher income tax payments during the
quarter.
The Group's Net Debt stood at €671.9mn as of September 30, 2023, down 13.2%
compared to September 30, 2022. The Group's ratio of Net Debt to 12-month
Adjusted EBITDA (AL) stood at 0.5x. During the quarter, the rating agency
Standard & Poor's raised OTE's long-term rating to "BBB+" with stable
outlook.
Revenues (€mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Greece 811.8 830.0 -2.2% 2,334.6 2,341.5 -0.3%
Romania mobile 71.1 76.8 -7.4% 209.4 233.4 -10.3%
(1.9) (2.0) -5.0% (5.3) (5.0) +6.0%
Eliminations
OTE GROUP 881.0 904.8 -2.6% 2,538.7 2,569.9 -1.2%
Adjusted EBITDA (AL) (€mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Greece 348.0 345.5 +0.7% 988.5 978.2 +1.1%
42.9% 41.6% +1.3pp 42.3% 41.8% +0.5pp
margin (%)
Romania mobile 4.6 12.6 -63.5% 12.9 38.0 -66.1%
6.5% 16.4% -9.9pp 6.2% 16.3% -10.1pp
margin (%)
OTE GROUP 352.6 358.1 -1.5% 1,001.4 1,016.2 -1.5%
40.0% 39.6% +0.4pp 39.4% 39.5% -0.1pp
margin (%)
GREECE
OPERATIONAL HIGHLIGHTS
KPIs Q3'23 Q3'22 y-o-y y-o-y Q3'23 Net Adds
% diff.
Fixed line access 2,690,707 2,701,728 -0.4% (11,021) (7,902)
Broadband subscribers 2,345,916 2,298,001 +2.1% 47,915 3,540
1,525,878 1,430,415 +6.7% 95,463 10,974
Total Fiber (FTTx)
215,710 109,995 +96.1% 105,715 22,122
FTTH
TV subscribers 665,261 643,776 +3.3% 21,485 17,364
Mobile Subscribers 7,365,503 7,411,445 -0.6% (45,942) (7,911)
3,086,026 2,924,312 +5.5% 161,714 34,791
Postpaid
4,279,477 4,487,133 -4.6% (207,656) (42,702)
Prepaid
Fixed Segment
OTE is making further progress in the broadband market, where its attractive
offering and customer upgrades led to another increase in total broadband
subscribers, to 2,346k. OTE's total broadband base rose by 2.1% year-on-year,
while broadband penetration on total fixed lines stood at 87%, up from 85% a
year earlier. OTE posted another quarter of positive net additions, at 4k, in
a traditionally low-contribution quarter, capturing the bulk of estimated
market net adds.
OTE expands its fiber network and upgrades its customer offering. As a result,
the total number of its fiber (FTTx) subscribers increased by 7% year-on-year,
with 11k net additions in the quarter. The total number of fiber (FTTx)
subscribers stood at 1,526k, while FTTx penetration on the total broadband
base stood at 65%. Speeds of 100Μbps or higher continue to gain traction,
reaching 46% of total FTTx connections.
The Company remains focused on its FTTH investment plan, further expanding its
FTTH footprint to an additional 97k homes passed during the quarter. OTE's
total FTTH footprint reached 1,148k homes passed as of September and should
exceed 1.3 million homes by year end. The FTTH subscriber base posted another
quarter of strong additions, at 22k, raising the total number of FTTH
subscribers to 216k. Total utilization on homes passed by OTE's infrastructure
stood at 19%, compared to 16% one year earlier, reflecting active sales effort
and enhanced network availability. FTTH penetration among OTE customers on
homes passed already exceeds 30%. Offering and marketing the best-in-class
available infrastructure in the country, OTE is succeeding in attracting the
bulk of FTTH connections and protecting its base. A new state voucher scheme,
"Smart Readiness", partly subsidizing FTTH in-building construction, was
recently launched, while an FTTH demand subsidy coupon, expected to be
introduced in 2024, should provide further support to FTTH takeup in the
future.
OTE's TV subscriber base increased by 3.3% year-on-year, reaching 665k. OTE
posted a strong quarter of net additions, at 17k, fueled by its superior
exclusive content. In recent months, an intense anti-piracy campaign has been
conducted by several authorities in coordination with the main operators to
combat illegal connections. OTE will continue to leverage its enriched content
portfolio, notably sports, benefiting from higher demand during the quarter.
Mobile Segment
Consistent with the positive trends achieved in past quarters, OTE's mobile
postpaid segment recorded another quarter of growth, up 5.5% year-on-year. Net
additions were also positive in the quarter, at 35k, supported by ongoing
customer additions and prepaid-to-postpaid upgrades. Ongoing growth in the
postpaid segment is driven by the Company's competitive advantage in terms of
customer loyalty and network superiority.
The Company continues to enjoy a strong competitive advantage in customer
satisfaction and network performance surveys. In recent months, Cosmote's
mobile network was recognized as "the Fastest Mobile Network in Greece" at the
Speedtest Awards(TM) by Ookla(®) for the 7(th) consecutive year and won "Best
in Test" by "umlaut" for the 9(th) time in a row. 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, having already reached its
2023 year-end target of 90% of total population, well ahead of competition. 5G
coverage has already reached 97% of population in Athens and Thessaloniki,
while 68 other cities enjoy coverage of over 95%, with speeds exceeding 1Gbps
in certain areas. OTE continues to promote data consumption over its networks
with the average data usage per month reaching 14GB in the quarter, up 28%.
OTE leverages the growth of data consumption alongside its network superiority
to strengthen its revenue base.
FINANCIAL HIGHLIGHTS
(€mn) Q3'23 Q3'22 +/- % 9M'23 9M'22 +/- %
Revenues 811.8 830.0 -2.2% 2,334.6 2,341.5 -0.3%
Retail Fixed Services 228.2 230.2 -0.9% 685.0 706.1 -3.0%
Including Data Com. 252.5 255.2 -1.0% 753.6 772.9 -2.5%
Mobile Service Revenues 276.1 275.3 +0.3% 760.0 747.1 +1.7%
Wholesale Services 142.1 150.7 -5.7% 415.8 440.2 -5.5%
Other Revenues 165.4 173.8 -4.8% 473.8 448.1 +5.7%
Adjusted EBITDA (AL) 348.0 345.5 +0.7% 988.5 978.2 +1.1%
margin (%) 42.9% 41.6% +1.3pp 42.3% 41.8% +0.5pp
Total revenues from Greek operations amounted to €811.8mn in the quarter,
down 2.2% year on year, as lower wholesale revenue and a temporary drop in ICT
billings more than offset the positive momentum in mobile, broadband, and TV.
Retail fixed service revenues decreased by 0.9%, a sharp improvement in trends
compared to prior quarters, as the continuing decline of certain legacy
services was nearly offset by recovery in broadband and TV.
Mobile service revenues were up 0.3% in the quarter. Excluding the drop in
visitor roaming revenues, attributable in full to price discounts provided to
operators, mobile service revenues would be up 1.4%, extending the strong
momentum of recent quarters. Visitor roaming revenues were down by almost
€2mn in the first nine months of 2023. Both postpaid and prepaid segments
pursue their positive trajectory, as OTE successfully executes its
more-for-more strategy and shifts customers to higher-value services. Several
initiatives recently implemented should further support revenue growth in
coming quarters.
Wholesale revenues decreased by 5.7% in Q3'23, reflecting lower revenues from
low-margin international transit traffic as well as a drop in the national
wholesale stream, reflecting the infrastructure built by other operators.
Other revenues were down 4.8% in the quarter, mainly reflecting delays in
certain public-sector contracts in the wake of the recent Greek parliamentary
elections. As a result, total ICT revenue dropped by approximately 6% in the
quarter. The segment is expected to gradually recover its growth momentum in
coming quarters. The Company continues to leverage its experience and
capabilities in network infrastructure, along with innovative and customized
IT and cloud solutions. Recent projects assigned to OTE in partnership include
the digital transformation of the Greek National Health Service Organization.
Total Adjusted EBITDA (AL) in Greece rose 0.7% in the quarter to €348.0mn,
yielding a margin of 42.9%, up sharply from 41.6% in Q3'22. The increase in
profitability despite the revenue drop was supported by successful
cost-containment efforts in several areas. Personnel costs were down 6.7%,
mainly reflecting the early retirement program implemented earlier this year,
alongside the three-year union agreement concluded last spring. Energy costs
also declined in the quarter; OTE renewed its energy-supply agreement for
2024. The Company also reduced bad-debt provisioning, consistent with the
trends observed in recent quarters and in 2022.
ROMANIA MOBILE
KPIs Q3'23 Q3'22 y-o-y y-o-y Q3'23 Net Adds
% diff.
Mobile Subscribers 3,899,095 4,081,628 -4.5% (182,533) (164,300)
1,882,952 1,824,384 +3.2% 58,568 19,369
Postpaid
2,016,143 2,257,244 -10.7% (241,101) (183,669)
Prepaid
(€mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Revenues 71.1 76.8 -7.4% 209.4 233.4 -10.3%
Mobile Service Revenues 47.6 51.2 -7.0% 141.7 154.1 -8.0%
Other Revenues 23.5 25.6 -8.2% 67.7 79.3 -14.6%
Adjusted EBITDA (AL) 4.6 12.6 -63.5% 12.9 38.0 -66.1%
margin (%) 6.5% 16.4% -9.9pp 6.2% 16.3% -10.1pp
Total revenues from Telekom Romania Mobile amounted to €71.1mn in the
quarter, down 7.4% year on year, an improvement compared to recent trends,
mainly reflecting lower interconnection and handset revenues. Romania
operations continue to be impacted by mobile termination rate (MTR) cuts and
certain customer-retention activities in the form of handset subsidies.
Consistent with prior quarters, mobile postpaid subscribers posted another
solid growth, up 3.2% year-on-year, setting the framework for future revenue
improvements. The performance of the prepaid segment was affected by certain
sampling campaigns implemented in 2022.
Adjusted EBITDA (AL) stood at €4.6mn in the quarter, down €8.0mn compared
to Q3'22, partly reflecting the high comparable base, as Q3'22 was positively
affected by certain non-recurring provision reversals and the impact of higher
energy costs in 2023.
SIGNIFICANT EVENTS OF THE QUARTER
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 reflects the recent upgrade of OTE's parent Deutsche
Telekom to BBB+ and OTE's robust financial metrics, including solid balance
sheet and resilient cash flow generation. In addition, the Hellenic Republic's
recent upgrade of its BB+ rating to investment grade BBB- with a stable
outlook 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 board of Directors of OTE, at its October 12, 2023, meeting,
approved the terms and conditions of this Draft Merger Agreement. The process
is expected to be completed in January 2024.
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. The Company acquired 9,331,045 own shares during
the period from March 1, 2023, to September 30, 2023, at an average price of
€13.96 per share. Out of these shares, 2,663,957 own shares acquired during
the period from March 1, 2023, to April 30, 2023, were cancelled and delisted
on July 18, 2023, along with 4,753,092 own shares awaiting cancellation
acquired in the previous Share Buyback Program. As of September 30, 2023, the
Company held 6,667,088 own shares.
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
Friday, November 10, 2023
10:00am (EET), 8:00am (GMT), 9:00am (CET), 03:00am (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/otegroup231110.html
(https://87399.themediaframe.eu/links/otegroup231110.html)
If you experience difficulty, please call + 30 210 9460803.
Investor Relation 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
https://www.cosmote.gr/cs/otegroup/en/investor_relations.html
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
September 30, 2023 and December 31, 2022
III. Consolidated Income Statement for the quarter and nine
months ended September 30, 2023 and comparative 2022
IV. Consolidated Statement of Cash Flows for the quarter and nine
months ended September 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 of the Consolidated Statement of Financial Position
(Exhibit II), Consolidated Income Statement (Exhibit III) and Consolidated
Statement of Cash Flow (Exhibit ΙV)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) 30/09/2023 30/09/2022
Long-term borrowings 859.0 881.3
Short-term portion of long-term borrowings 23.1 23.1
Short-term borrowings 80.0 150.0
Lease liabilities (long-term portion) 168.3 173.6
Lease liabilities (short-term portion) 57.3 69.9
Financial liabilities related to wallets 3.3 -
Cash and cash equivalents (519.1) (523.7)
Net Debt 671.9 774.2
EBITDA - Adjusted EBITDA - Adjusted EBITDA After Lease (AL)
· EBITDA is derived directly from the Financial Statements of the Group,
line "Operating profit before financial and investing activities,
depreciation, amortization and impairment" of the Income Statement. EBITDA is
defined as total revenues plus other operating income less total operating
expenses before depreciation, amortization and impairment. EBITDA is intended
to provide useful information to analyze the Group's operating performance.
· Adjusted EBITDA is calculated by excluding the impact of costs related
to voluntary leave schemes 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.
Q3'23 (€ mn) OTE Group Greece Romania
Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22
Revenues 881.0 904.8 811.8 830.0 71.1 76.8
Other Operating Income 4.4 0.7 2.6 0.3 1.8 0.4
Total Operating Expenses (ex-Depreciation, amortization & impairment) (519.1) (529.7) (456.3) (472.1) (64.7) (59.6)
EBITDA 366.3 375.8 358.1 358.2 8.2 17.6
Costs related to voluntary leave schemes 3.9 2.5 3.9 2.0 - 0.5
Other restructuring costs - 0.1 - - - 0.1
Adjusted EBITDA 370.2 378.4 362.0 360.2 8.2 18.2
Depreciation of lessee use rights to leased assets (15.5) (18.2) (12.2) (13.0) (3.3) (5.2)
Interest expense on leases (2.1) (2.1) (1.8) (1.7) (0.3) (0.4)
Adjusted EBITDA (AL) 352.6 358.1 348.0 345.5 4.6 12.6
margin % 40.0% 39.6% 42.9% 41.6% 6.5% 16.4%
9M'23 (€ mn) OTE Group Greece Romania
9M'23 9M'22 9M'23 9M'22 9M'23 9M'22
Revenues 2,538.7 2,569.9 2,334.6 2,341.5 209.4 233.4
Other Operating Income 8.6 7.4 5.5 6.1 3.1 1.3
Total Operating Expenses (ex-Depreciation, amortization & impairment) (1,516.8) (1,535.0) (1,339.0) (1,359.0) (183.1) (181.0)
EBITDA 1,030.5 1,042.3 1,001.1 988.6 29.4 53.7
Costs related to voluntary leave schemes 30.5 35.2 30.1 34.5 0.4 0.7
Other restructuring costs 0.8 0.5 - - 0.8 0.5
Adjusted EBITDA 1,061.8 1,078.0 1,031.2 1,023.1 30.6 54.9
Depreciation of lessee use rights to leased assets (53.8) (55.3) (37.5) (39.7) (16.3) (15.6)
Interest expense on leases (6.6) (6.5) (5.2) (5.2) (1.4) (1.3)
Adjusted EBITDA (AL) 1,001.4 1,016.2 988.5 978.2 12.9 38.0
margin % 39.4% 39.5% 42.3% 41.8% 6.2% 16.3%
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) Q3'23 Q3'22 9M'23 9M'22
Purchase of property plant and equipment and intangible assets - Capex (183.3) (178.1) (429.9) (440.1)
Spectrum Payments - - - 1.2
Adjusted CAPEX (183.3) (178.1) (429.9) (438.9)
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) Q3'23 Q3'22 9M'23 9M'22
Net cash flows from operating activities 227.2 278.2 881.5 958.0
Purchase of property, plant, equipment & intangible assets (183.3) (178.1) (429.9) (440.1)
Interest received 1.9 0.8 7.2 1.7
Free Cash Flow 45.8 100.9 458.8 519.6
Lease repayments (18.8) (20.6) (61.7) (60.3)
Free Cash Flow After Lease (AL) 27.0 80.3 397.1 459.3
Payment for voluntary leave schemes 23.7 33.6 28.7 36.0
Payment for other restructuring costs - - 1.6 5.1
Spectrum payments - - - 1.2
Adjusted FCF After Lease (AL) 50.7 113.9 427.4 501.6
II. ΟΤΕ GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ mn) 30/09/2023 31/12/2022
ASSETS
Non - current assets
Property, plant and equipment 2,136.7 2,081.1
Right-of-use assets 238.3 266.6
Goodwill 376.6 376.6
Telecommunication licenses 272.0 296.1
Other intangible assets 274.6 335.1
Investments 0.1 0.1
Loans to pension funds 61.7 64.7
Deferred tax assets 183.5 178.2
Contract costs 28.7 30.2
Other non-current assets 69.7 75.3
Total non - current assets 3,641.9 3,704.0
Current assets
Inventories 51.1 54.0
Trade receivables 539.0 471.2
Other financial assets 5.3 4.8
Contract assets 58.6 49.6
Other current assets 129.4 123.7
Restricted Cash 0.6 1.8
Cash and cash equivalents 519.1 590.1
Total current assets 1,303.1 1,295.2
TOTAL ASSETS 4,945.0 4,999.2
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,206.3 1,227.3
Share premium 430.9 438.9
Treasury shares (94.4) (73.5)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (137.8) (138.8)
Changes in non-controlling interests (3,314.1) (3,314.1)
Retained earnings 3,334.1 3,267.9
Total equity attributable to owners of the Parent 1,865.7 1,848.4
Non-controlling interests 0.5 0.5
Total equity 1,866.2 1,848.9
Non-current liabilities
Long-term borrowings 859.0 881.5
Provision for staff retirement indemnities 93.7 96.7
Provision for youth account 76.9 86.1
Contract liabilities 80.2 40.8
Lease liabilities 168.3 182.1
Deferred tax liabilities 0.3 0.4
Other non - current liabilities 39.3 55.7
Total non - current liabilities 1,317.7 1,343.3
Current liabilities
Trade accounts payable 809.0 874.0
Short-term borrowings 80.0 150.0
Short-term portion of long-term borrowings 23.1 23.1
Income tax payable 144.6 92.3
Contract liabilities 158.2 136.1
Lease liabilities 57.3 76.1
Dividends payable 2.5 2.4
Other current liabilities 486.4 453.0
Total current liabilities 1,761.1 1,807.0
TOTAL EQUITY AND LIABILITIES 4,945.0 4,999.2
III. OTE GROUP CONSOLIDATED INCOME STATEMENT
(€ mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Fixed business:
Retail services revenues 228.2 230.2 -0.9% 685.0 706.1 -3.0%
Wholesale services revenues 142.0 150.6 -5.7% 415.7 440.1 -5.5%
Other revenues 87.2 90.8 -4.0% 248.0 230.5 +7.6%
Total revenues from fixed business 457.4 471.6 -3.0% 1,348.7 1,376.7 -2.0%
Mobile business:
Service revenues 323.4 326.3 -0.9% 901.2 900.8 0.0%
Handset revenues 72.9 79.3 -8.1% 207.0 203.3 +1.8%
Other revenues 4.3 5.0 -14.0% 12.0 24.2 -50.4%
Total revenues from mobile business 400.6 410.6 -2.4% 1,120.2 1,128.3 -0.7%
Miscellaneous other revenues 23.0 22.6 +1.8% 69.8 64.9 +7.6%
Total revenues 881.0 904.8 -2.6% 2,538.7 2,569.9 -1.2%
Other operating income 4.4 0.7 - 8.6 7.4 +16.2%
Operating expenses
Interconnection and roaming costs (107.5) (116.1) -7.4% (307.3) (330.9) -7.1%
Provision for expected credit losses (9.8) (12.9) -24.0% (28.7) (39.0) -26.4%
Personnel costs (103.5) (110.0) -5.9% (321.6) (342.8) -6.2%
Costs related to voluntary leave schemes (3.9) (2.5) +56.0% (30.5) (35.2) -13.4%
Commission costs (22.4) (18.1) +23.8% (65.2) (58.8) +10.9%
Merchandise costs (92.4) (96.8) -4.5% (250.1) (250.4) -0.1%
Maintenance and repairs (22.7) (19.4) +17.0% (62.0) (58.6) +5.8%
Marketing (23.5) (18.8) +25.0% (53.8) (48.7) +10.5%
Other operating expenses (133.4) (135.1) -1.3% (397.6) (370.6) +7.3%
Total operating expenses before depreciation, amortization and impairment (519.1) (529.7) -2.0% (1,516.8) (1,535.0) -1.2%
Operating profit before financial and investing activities, depreciation, 366.3 375.8 -2.5% 1,030.5 1,042.3 -1.1%
amortization and impairment
Depreciation, amortization and impairment (161.5) (166.0) -2.7% (493.3) (502.8) -1.9%
Operating profit before financial and investing activities 204.8 209.8 -2.4% 537.2 539.5 -0.4%
Income and expense from financial and investing activities
Interest and related expenses (8.6) (8.2) +4.9% (25.1) (25.1) 0.0%
Interest income 1.9 0.8 +137.5% 7.2 1.7 -
Foreign exchange differences, net 0.7 3.1 -77.4% 2.6 5.6 -53.6%
Gains / (losses) from investments and other financial assets - Impairment (0.2) 0.1 - 0.4 (0.2) -
Total loss from financial and investing activities (6.2) (4.2) +47.6% (14.9) (18.0) -17.2%
Profit before tax 198.6 205.6 -3.4% 522.3 521.5 +0.2%
Income tax (48.6) (45.3) +7.3% (125.1) (124.9) +0.2%
Profit for the period 150.0 160.3 -6.4% 397.2 396.6 +0.2%
Attributable to:
Owners of the parent 150.0 160.2 -6.4% 397.2 396.4 +0.2%
Non-controlling interests - 0.1 - - 0.2 -
IV.GROUP CONSOLIDATED STATEMENT OF CASH FLOW
(€ mn) Q3'23 Q3'22 y-o-y 9M'23 9M'22 y-o-y
Cash flows from operating activities
Profit before tax 198.6 205.6 -3.4% 522.3 521.5 +0.2%
Adjustments for:
Depreciation, amortization and impairment 161.5 166.0 -2.7% 493.3 502.8 -1.9%
Costs related to voluntary leave schemes 3.9 2.5 +56.0% 30.5 35.2 -13.4%
Provision for staff retirement indemnities 6.9 1.0 - 3.1 3.0 +3.3%
Provision for youth account - 0.3 - (2.4) 0.9 -
Foreign exchange differences, net (0.7) (3.1) -77.4% (2.6) (5.6) -53.6%
Interest income (1.9) (0.8) +137.5% (7.2) (1.7) -
(Gains) / losses from investments and other financial assets- Impairment 0.2 (0.1) - (0.4) 0.2 -
Interest and related expenses 8.6 8.2 +4.9% 25.1 25.1 0.0%
Working capital adjustments: (18.3) (8.8) +108.0% (40.4) (10.6) -
Decrease / (increase) in inventories 1.7 (1.3) - 2.9 (9.1) -131.9%
Decrease / (increase) in receivables (27.2) (11.9) +128.6% (74.6) (30.5) +144.6%
(Decrease) / increase in liabilities (except borrowings) 7.2 4.4 +63.6% 31.3 29.0 +7.9%
Payment for voluntary leave schemes (23.7) (33.6) -29.5% (28.7) (36.0) -20.3%
Payment of staff retirement indemnities and youth account, net of employees' (2.0) (2.7) -25.9% (6.6) (6.8) -2.9%
contributions
Interest and related expenses paid (except leases) (8.4) (16.9) -50.3% (17.0) (23.2) -26.7%
Interest paid for leases (2.1) (2.1) 0.0% (6.6) (6.5) +1.5%
Income tax paid (95.4) (37.3) +155.8% (80.9) (40.3) +100.7%
Net cash flows from operating activities 227.2 278.2 -18.3% 881.5 958.0 -8.0%
Cash flows from investing activities
Sale or maturity of financial assets - - - - 0.7 -
Purchase of financial assets (0.1) (0.2) -50.0% (0.8) (0.6) +33.3%
Payments related to disposal of subsidiaries/investments (0.2) (7.4) -97.3% (0.2) (7.8) -97.4%
Cash and cash equivalents of subsidiaries disposed - (0.7) - - (0.7) -
Repayment of loans receivable 1.8 2.4 -25.0% 5.4 6.0 -10.0%
Purchase of property, plant and equipment and intangible assets (183.3) (178.1) +2.9% (429.9) (440.1) -2.3%
Movement in restricted cash 0.1 - - - 0.1 -
Interest received 1.9 0.8 +137.5% 7.2 1.7 -
Net cash flows used in investing activities (179.8) (183.2) -1.9% (418.3) (440.7) -5.1%
Cash flows from financing activities
Acquisition of treasury shares (69.9) (64.7) +8.0% (129.0) (215.4) -40.1%
Subsidiary's share capital reduction to minority shareholders - (0.8) - - (0.8) -
Expenses related to subsidiary's share capital increase - (0.1) - - (0.1) -
Proceeds from loans - 150.0 - 80.0 300.0 -73.3%
Repayment of loans (11.6) (386.2) -97.0% (173.1) (397.7) -56.5%
Lease repayments (18.8) (20.6) -8.7% (61.7) (60.3) +2.3%
Financial liabilities related to wallets 0.3 - - (0.7) - -
Dividends paid to Company's owners (249.7) (249.8) 0.0% (249.9) (249.9) 0.0%
Net cash flows used in financing activities (349.7) (572.2) -38.9% (534.4) (624.2) -14.4%
Net decrease in cash & cash equivalents (302.3) (477.2) -36.7% (71.2) (106.9) -33.4%
Cash and cash equivalents, at the beginning of the period 821.1 1,001.1 -18.0% 590.1 630.7 -6.4%
Net foreign exchange differences 0.3 (0.2) - 0.2 (0.1) -
Cash and cash equivalents, at the end of the period 519.1 523.7 -0.9% 519.1 523.7 -0.9%
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