REG - Hellenic Telecomms - OTE Q2 2024 Results
07/08/2024 08:30
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RNS Number : 5303Z Hellenic Telecomms Organization S A 07 August 2024
OTE GROUP REPORTS 2024 SECOND QUARTER RESULTS
Highlights
· Continuing growth in Greek operations: Revenues up 8%, Adj. EBITDA (AL)
up 1.5%
o Mobile Service Revenues up 4%
o Solid trends in operational KPIs
§ Positive momentum in Mobile, Broadband, TV, and ICT
§ Another quarter of record FTTH subscriber addition, footprint expansion,
and higher utilization
· Significant initiatives to drive growth
o FTTH Gigabit Voucher Scheme approved by European Commission
o OTE-NOVA agreement for cross-supply of sports content
o FTTH wholesale agreement to boost demand and infrastructure utilization
· Group Revenues up sharply (+7%), Adj. EBITDA (AL) stable on Romania
challenges
(€ mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Revenues 910.7 854.1 +6.6% 1,788.3 1,657.7 +7.9%
Adjusted EBITDA (AL) 326.7 326.8 0.0% 652.7 648.8 +0.6%
35.9% 38.3% -2.4pp 36.5% 39.1% -2.6pp
margin %
Operating profit before financial and investing activities 171.1 151.2 +13.2% 353.3 332.4 +6.3%
Profit to owners of the parent 125.9 111.9 +12.5% 260.7 247.2 +5.5%
Adj. Profit to owners of the parent 140.5 133.0 +5.6% 283.0 268.8 +5.3%
EPS (€) 0.3047 0.2687 +13.4% 0.6289 0.5786 +8.7%
Adjusted Capex 156.1 166.7 -6.4% 273.6 246.6 +10.9%
Free Cash Flow (AL) 121.2 144.0 -15.8% 248.3 370.1 -32.9%
Cash and cash equivalents 686.0 821.1 -16.5% 686.0 821.1 -16.5%
Net Debt 457.0 390.6 +17.0% 457.0 390.6 +17.0%
Note: The purpose and calculations of all 'Adjusted' data are detailed in the
Alternative Performance Measures Section (#APM)
Message from the Chairman & CEO, Kostas Nebis:
"I am proud to have the opportunity and responsibility to lead OTE Group into
the future, adding another stone to the solid edifice built by my
predecessors. In the few weeks since I rejoined OTE, I have been able to
appreciate first-hand that the Group enjoys the right skills, resources, and
purpose to succeed. I am confident that the prospects ahead of us are
encouraging, and we can improve our performance, as Greece's communication and
digitization requirements grow.
"We are the leading provider of digital services in the Greek market of the
technological solutions that customers expect for work, for interaction, and
for entertainment. Using our competitive advantages, we will identify and
exploit the opportunities to sustain our growth. We will pursue our
investments in fiber, 5G and TV content, and accelerate their monetization. We
will step up the transformation of our business model and leverage our Group
platforms and customer appeal. Initiatives completed over the past few weeks,
such as the TV sports content-sharing and FTTH wholesale agreements, are fully
aligned with the direction we intend to take, benefiting the whole market as
well as OTE. All our energies are geared at driving sustainable growth
through digitalization, simplification, and innovation, to create more value
for customers, shareholders, and society at large."
Outlook
OTE aims to continue to strengthen its network leadership in Greece,
leveraging its significant competitive advance in FTTH infrastructure and 5G
coverage. The expansion of its FTTH infrastructure ensures value enhancement
and higher loyalty, while the widely recognized superiority of its 5G network
enables ongoing mobile service revenue growth. Recent awards by ookla(®) and
"umlaut" provide a clear evidence of mobile network excellence. These
advantages are a key consideration in OTE's efforts to be key pillar of
Greece's digitization growth. 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.
Recent actions and developments in OTE's home market are expected to further
drive its performance going forward:
Ø In broadband, the recent approval of the anticipated Gigabit Voucher should
promote additional takeup of high-quality FTTH services.
Ø In TV, the sport content-sharing agreement with NOVA should enhance Pay-TV
services, providing an effective policy against piracy.
Ø In wholesale, the European Commission has approved planned volume discounts
in the FTTH wholesale market. The plan should further promote transition
towards fiber optic services and enable all operators to grow the market.
In Greece, for the rest of 2024 and based on current market dynamics, OTE
expects to maintain current trends supported by both revenue growth and cost
efficiencies. On a Group level, operations should remain impacted by
challenging conditions in Romania.
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 and weaker cashflow in Romania. 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 Free Cash Flow it expects to
generate in 2024. Total shareholder remuneration is targeted at approximately
€450mn, comprising €297mn in cash dividend and approximately €153mn in
share buyback.
· The approved dividend per share stands at €0.71, up 23% compared to
2023. The final dividend that was paid out on July 10, 2024, stood at
€0.7216 gross per share, increased by the dividend corresponding to own
shares that were held by the Company on the ex-dividend date.
· Implementation of the Company's share buyback program, commenced on
February 26, 2024, is currently ongoing. As of the date of this release, the
Company has disbursed 48% of the amount earmarked for its total 2024 share
buyback program.
OTE GROUP HIGHLIGHTS
In Q2'24, total Revenues of OTE Group were up 6.6% to €910.7mn, fueled by
solid performance in Greece. Revenues from Greek operations were up 7.6%,
benefiting from solid growth in Mobile, Broadband, TV, and ICT. In Romania,
revenues were down 3.8% in a highly competitive market, partly 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 €567.3mn in Q2'24, up 11.8%, mainly reflecting
higher direct costs, associated with higher revenues.
Group Adjusted EBITDA (AL) was unchanged at €326.7mn, as the 1.5% growth from Greek operations was offset by pressure on Romania's profitability. The significant contribution from ICT and low-margin international wholesale revenue explains the drop in Group Adjusted EBITDA (AL) margin in the quarter to 35.9%.
In Q2'24 Capex amounted to €156.1mn, down 6.4% from Q2'23. During the
quarter, OTE continued to expand Greece's largest FTTH network, extending its
footprint to additional households and businesses. Capex in Greece and Romania
stood at €145.5mn and €10.6mn, respectively.
Free Cash Flow (AL) stood at €121.2mn, down 15.8% versus Q2'23, primarily
reflecting timing differences in voluntary exit scheme payments compared to
last year. The company remains on track to meet its full-year Free Cash Flow
target.
The Group's Net Debt stood at €457.0mn as of June 30, 2024, and the ratio of
net debt to 12-month Adjusted EBITDA (AL) stood at 0.3x. The Group does not
face any significant bond maturity until September 2026 (€500mn 0.875%
Notes).
Revenues (€mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Greece 846.1 786.6 +7.6% 1,658.4 1,522.8 +8.9%
Romania mobile 66.7 69.3 -3.8% 132.9 138.3 -3.9%
Eliminations (2.1) (1.8) +16.7% (3.0) (3.4) -11.8%
OTE GROUP 910.7 854.1 +6.6% 1,788.3 1,657.7 +7.9%
Adjusted EBITDA (AL) (€mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Greece 326.8 322.0 +1.5% 650.0 640.5 +1.5%
margin (%) 38.6% 40.9% -2.3pp 39.2% 42.1% -2.9pp
Romania mobile (0.1) 4.8 -102.1% 2.7 8.3 -67.5%
margin (%) -0.1% 6.9% -7pp 2.0% 6.0% -4pp
OTE GROUP 326.7 326.8 0.0% 652.7 648.8 +0.6%
margin (%) 35.9% 38.3% -2.4pp 36.5% 39.1% -2.6pp
GREECE
OPERATIONAL HIGHLIGHTS
KPIs Q2'24 Q2'23 y-o-y y-o-y Q2'24 Net Adds
% diff.
Fixed line access 2,602,041 2,622,623 -0.8% (20,582) (8,766)
Broadband subscribers 2,407,051 2,387,461 +0.8% 19,590 988
1,581,437 1,513,500 +4.5% 67,937 17,809
Total Fiber (FTTx)
324,308 193,588 +67.5% 130,720 37,517
FTTH
TV subscribers 686,518 646,717 +6.2% 39,801 (21)
Mobile Subscribers 7,189,258 7,325,380 -1.9% (136,122) 81,974
2,784,160 2,605,579 +6.9% 178,581 51,747
Postpaid
4,405,098 4,719,801 -6.7% (314,703) 30,227
Prepaid
Note: All operational KPI's for 2024 and 2023 period have been reclassified.
Fixed, Broadband and TV operational data include only RGU. In the Mobile
segment reclassification refers to a certain shift between Postpaid and
Prepaid segment as well as between Postpaid and Broadband.
Fixed Segment
In Q2'24, the Company remained focused on its FTTH investment plan, reaching
1,460k homes at the end of June. OTE leads the market, accounting for more
than 75% of the country's total installed FTTH lines. OTE intends to pursue
its investment strategy and plans to reach approximately 1.8 million homes by
year end. 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.
OTE posted another quarter of record FTTH customer additions, at 38K,
capturing once again the bulk of estimated market net adds. The number of OTE
FTTH subscribers stood at 324k, of which more than 85% utilize OTE's own FTTH
network infrastructure. Moreover, approximately 40% of competitor FTTH
subscribers rely on OTE's infrastructure as well. As a result, total
utilization on homes passed by OTE's infrastructure reached 24%, compared to
19% one year earlier, reflecting incremental network availability and
effective sales initiatives. The Gigabit Voucher plan recently approved by the
European Commission, expected to become available in Q4, should further
encourage takeup of FTTH connections in the market. The plan will take the
form of maximum €200 connectivity vouchers for speeds of at least 250Mbps
for a 24-month period. In addition, the European Commission approved the offer
of volume discounts at the wholesale level to promote transition to fiber
optic services. Reflecting the significantly reduced churn, enhanced customer
satisfaction, and lower operating costs associated with fiber networks,
success in expanding the FTTH subscriber base is critical to setting the
foundation for long-term sustainable growth. With FTTH penetration being at
13% of OTE's total Broadband connections, the room for growth is clear.
OTE continues to make progress in its total fiber (FTTx) customer base. The
total number of FTTx subscribers stood at 1,581k, while FTTx penetration on
total broadband base stood at 65.7% up from 63.4% a year earlier. Speeds of
100Μbps or above continue to gain traction, reaching 49% of total FTTx
connections. Total OTE broadband subscribers stood at 2,407k, up 0.8%
year-on-year while broadband penetration on total fixed lines rose to 93%,
from 91% a year earlier.
OTE's total TV subscriber base reached 687k at the end of Q2'24, a
year-on-year increase of 6.2%. The market is set to benefit from the recent
agreement between OTE and NOVA regarding the sharing of their sports channels,
which so far were offered on an exclusive basis on each company's platform. In
addition to significantly enhancing the Pay-TV content offering to all Greek
consumers, the agreement constitutes an effective method to offer incremental
value to consumers and combat piracy, and should thereby drive growth of the
overall Pay-TV market.
Mobile Segment
OTE achieved another period of growth in its mobile postpaid base, totaling
2.8mn subscribers, a 6.9% year-on-year increase. Postpaid additions were
positive in the quarter, at 52k, supported by ongoing customer additions and
prepaid-to-postpaid upgrades. Ongoing growth in the postpaid segment is driven
by OTE's clear mobile network leadership and its competitive advantage in
terms of customer excellence.
The Company continues to enjoy a strong competitive advantage in customer
satisfaction and network performance surveys. OTE's mobile network was
recognized as "the Fastest Mobile Network in Greece" at the Speedtest AwardsTM
by Ookla® for the eighth consecutive year and won "Best in Test" by "umlaut"
for the tenth consecutive year. Recognition of OTE's network quality,
supported by ongoing investments, drives positive customer preferences and
revenue growth.
Population coverage of OTE's 5G network has exceeded 99%, while OTE was the
first operator to carry out the commercial launch of a 5G+ network in Greece.
The next-generation 5G Stand-Alone (SA) technology will further enhance
customer experience, gradually resulting in even higher download and upload
speeds ultra-low latency, improved indoor coverage, moving ever closer to
realization of a "Gigabit Society".
The population coverage of OTE's 5G+ network has already reached 50% and will
be expanded to include additional areas across Greece, aiming to reach 60%
population coverage by the end of 2024.
OTE continues to promote data consumption over its networks with the average
data usage per month reaching 13.2GB in the quarter, up sharply from 10.3GB
one year earlier. OTE leverages the growth of data consumption alongside its
network superiority to strengthen its revenue base.
FINANCIAL HIGHLIGHTS
(€mn) Q2'24 Q2'23 +/- % 6M'24 6M'23 +/- %
Revenues 846.1 786.6 7.6% 1,658.4 1,522.8 8.9%
Retail Fixed Services 227.5 227.6 0.0% 456.6 456.8 0.0%
...Including Data Com. 250.6 250.7 0.0% 502.2 501.1 +0.2%
Mobile Service Revenues 257.4 248.3 +3.7% 500.7 483.9 +3.5%
Wholesale Services 164.4 149.0 +10.3% 313.4 273.7 +14.5%
Other Revenues 196.8 161.7 +21.7% 387.7 308.4 +25.7%
Adjusted EBITDA (AL) 326.8 322.0 +1.5% 650.0 640.5 +1.5%
margin (%) 38.6% 40.9% -2.3pp 39.2% 42.1% -2.9pp
Total revenues from Greek operations posted another quarter of strong growth,
up 7.6% to €846.1mn. Top line growth reflects the positive momentum in
Mobile, Broadband, TV, and ICT, while low-margin international wholesale
revenues were up significantly in the quarter.
Retail fixed service revenues were unchanged in the quarter, as continuing
positive trends in Broadband, through upselling to FTTx, and TV were offset by
contracting legacy services. In addition, the agreement with NOVA should
further support Pay-TV revenue growth going forward.
Mobile service revenues posted another solid increase, up 3.7% in the quarter.
Both postpaid and prepaid revenues were up once again in the quarter,
reflecting the successful execution of OTE's more-for-more strategy, customer
transition to higher-value services and certain initiatives implemented late
in 2023. Ongoing recognition of mobile network performance along with strong
competitive positions in customer satisfaction should support future growth.
The outstanding high percentage of pre-paid subscribers, combined with
relatively low data consumption, provides an ongoing growth opportunity.
Wholesale revenues were up 10.3% in the quarter, mainly reflecting a sharp
increase in international transit traffic revenues, offsetting the anticipated
drop in higher-margin national wholesale due to the infrastructure built by
other operators.
Other revenues were up 21.7% in the quarter, primarily reflecting strong ICT
momentum. Handset sales were also up. The Company maintained its strong
Business-to-Business (B2B) positions with a 33% revenue growth in ICT. The
Group acts as a major Systems Integrator for businesses and the public sector,
supporting digitalization and simplification with the provision of
state-of-the-art technology infrastructure, innovative and customized IT and
cloud solutions.
Adjusted EBITDA (AL) in Greece increased by 1.5% to €326.8mn, consistent
with the trends evidenced in prior quarters. Margin contraction to 38.6%
reflects the increasing contribution from lower-margin revenue streams. The
steady increase in mobile revenue along with ongoing cost containment on the
personnel front offset the drop in the national wholesale segment and higher
marketing expenses in the quarter.
ROMANIA MOBILE
KPIs Q2'24 Q2'23 y-o-y y-o-y Q2'24 Net Adds
% diff.
Mobile Subscribers 3,600,870 4,063,395 -11.4% -462,525 -60,059
1,951,151 1,863,583 +4.7% 87,568 19,489
Postpaid
1,649,719 2,199,812 -25.0% -550,093 -79,548
Prepaid
(€mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Revenues 66.7 69.3 -3.8% 132.9 138.3 -3.9%
Mobile Service Revenues 38.3 46.3 -17.3% 77.2 94.1 -18.0%
Other Revenues 28.4 23.0 +23.5% 55.7 44.2 +26.0%
Adjusted EBITDA (AL) (0.1) 4.8 -102.1% 2.7 8.3 -67.5%
margin (%) -0.1% 6.9% -7pp 2.0% 6.0% -4pp
Total revenues from Telekom Romania Mobile (TKRM) amounted to €66.7mn in the
quarter, down 3.8% year on year. Mobile service revenues were impacted by
challenging competitive dynamics in the market and customer-retention
activities 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 4.7% year-on-year increase to a total of 1.95mn
subscribers. Net additions in the quarter stood at 19k. 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) from Romanian operations was impacted by topline pressure
along with the €1.3 effect from the new tax on revenue introduced in 2024.
SIGNIFICANT EVENTS OF THE QUARTER
Dividend
On June 28, 2024, the Annual General Meeting of Shareholders approved the
distribution of a dividend €0.71 per share. The final dividend of €0.7216
adjusted, for own shares outstanding as of the ex-dividend date, was paid out
on July 10, 2024.
Share Buyback Program and Cancellation of Own Shares
The Extraordinary General Shareholder Meeting of November 30, 2023, approved a
new two-year Share Buyback Program in the context of the Shareholder
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.
During the second quarter of 2024, the Company acquired 3,396,415 shares at an
average price of €13.90 per share.
The Annual General Shareholder Meeting of June 28, 2024 approved in accordance
with article 49 of Law 4548/2018, the cancellation of 5,308,440 own shares,
along with the reduction of the Company's share capital by Euro 15,022,885.20
(equivalent to the above number of own shares multiplied by the nominal value
of the Company's share, i.e. Euro 2.83) and the amendment of Article 5 ("Share
Capital") of the Company's Articles of Incorporation.
The Company acquired the above shares during the period from November 1, 2023,
to May 31, 2024, at an average price of Euro 13.59 per share. Following
notification to the Corporate Actions Committee of the Athens Stock Exchange
and consummation of other legal and regulatory procedures, the aforementioned
shares were canceled and delisted from the Athens Stock Exchange (ATHEX) as of
July 24, 2024, when trading of the aforementioned shares on the ATHEX has
ceased.
Issuance of new Bond
On June 27, 2024, OTE PLC issued a €40mn bond due October 2024, with a yield
of 3.997% per annum, fully subscribed by Deutsche Telekom AG. The proceeds
will be used to cover general corporate needs of OTE Group.
Board of Directors
Following the Annual General Shareholder Meeting of June 28, 2024, a new
ten-member Board of Directors was elected for a three-year term. The new Board
of Directors was formed into a corporate body on same day. Following this, the
composition of the ΟΤΕ's Board of Directors is as follows:
1. Mr. Konstantinos Nebis, Chairman and CEO, Executive member
2. Mr. Eelco Blok, Vice-Chairman, Independent non-Executive member
3. Mr. Daniel Daub, non-Executive member
4. Ms. Elvira Gonzalez Sevilla, non-Executive member
5. Ms. Dominique Yvette M. Leroy, non-Executive member
6. Ms. Kyra Elen Sibylle Orth, non-Executive member
7. Mr. Alexandros Athanassiou, Independent non-Executive member
8. Mr. Konstantinos Gravas, Independent non-Executive member
9. Mr. Charalampos Mazarakis, Executive member
10.Ms Christina Bousoulega, non-Executive member
The term of office of the Board members expires at the 2027 Ordinary General
Meeting.
SUBSEQUENT EVENTS
OTE and NOVA TV sports agreement
On July 16, 2024, OTE and NOVA Telecommunications & Media Single Member
S.A. ("the Parties") have entered in a wholesale agreement regarding the
cross-supply of their sports channels, which so far were offered on an
exclusive basis on each party's platform. The agreement will enable each of
the parties to offer significantly enhanced Pay-TV services to Greek
consumers, allowing them to access more sports content in a single
subscription. The agreement will be an effective policy against piracy, which
distorts the Pay-TV market, the content providers and revenues of the Greek
State and is anticipated to drive the growth of the total Pay-TV market.
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
Wednesday, August 7, 2024
13:00pm (EEST), 11:00am (BST), 12:00pm (CEST), 06:00am (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/otegroup240807.html
(https://trackme.apifon.com/https%3A%2F%2F87399.themediaframe.eu%2Flinks%2Fotegroup240807.html/N3ZMSVZacnNERFFkX1o5UjVLSG9qc2tEWlBMUlpkMEljTm1LU3BrMWdVU1dUdXpnZUItUXNjb2txZEJaejRIQzhjazBySFJFa1Q4RHItRVBFREtfQmc9PQ/b2VpN1NCN3RYUXRRaTNESmw3TnVTX3ozRk1feTRiQlFCNWMwUy1Bam9aRT0/OFVmQzFRSm1rSE1HakhwSHprd0F5dkROZ3ozSG9TMU5fZE52bi1FeG9pX1loOHZIMHFXd0lyVjk1eWRZd1hqbUk0RGlfcWM0NE00MER6T0ptenNGaG8xRzhneUFFanB4UFVodTFyb3JVSU09)
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
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 June
30, 2024 and December 31, 2023
III. Consolidated Income Statement for the quarter and six
months ended June 30, 2024 and comparative 2023
IV. Consolidated Statement of Cash Flows for the quarter and six
months ended June 30, 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 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 long-term borrowings plus short-term portion of long-term
borrowings plus short-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) 30/06/2024 30/06/2023
Long-term borrowings 848.1 870.4
Short-term portion of long-term borrowings - 23.1
Short-term borrowings 40.0 80.0
Lease liabilities (long-term portion) 183.6 171.7
Lease liabilities (short-term portion) 64.4 63.5
Financial liabilities related to digital wallets 6.9 3.0
Cash and cash equivalents (686.0) (821.1)
Net Debt 457.0 390.6
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 amortization and
interest expense related to leases.
EBITDA, Adjusted EBITDA and Adjusted EBITDA (AL) margin (%) is defined as the
respective EBITDA divided by total revenues.
Q2'24 (€ mn) OTE Group Greece Romania
Q2'24 Q2'23 Q2'24 Q2'23 Q2'24 Q2'23
Revenues 910.7 854.1 846.1 786.6 66.7 69.3
Other Operating Income 0.4 2.3 (0.2) 1.3 0.6 1.0
Total Operating Expenses (before Depreciation, amortization and impairment) (586.0) (534.1) (523.8) (478.1) (64.3) (57.8)
EBITDA 325.1 322.3 322.1 309.8 3.0 12.5
Costs related to voluntary leave schemes 18.7 26.0 18.7 25.6 - 0.4
Other restructuring costs - 0.8 - - - 0.8
Adjusted EBITDA 343.8 349.1 340.8 335.4 3.0 13.7
Amortization of lessee use rights to leased assets (15.0) (20.1) (12.1) (11.8) (2.9) (8.3)
Interest expense on leases (2.1) (2.2) (1.9) (1.6) (0.2) (0.6)
Adjusted EBITDA (AL) 326.7 326.8 326.8 322.0 (0.1) 4.8
margin % 35.9% 38.3% 38.6% 40.9% -0.1% 6.9%
6M'24 (€ mn) OTE Group Greece Romania
6M'24 6M'23 6M'24 6M'23 6M'24 6M'23
Revenues 1,788.3 1,657.7 1,658.4 1,522.8 132.9 138.3
Other Operating Income 4.0 4.2 3.1 2.9 1.0 1.3
Total Operating Expenses (before Depreciation, amortization and impairment) (1,128.4) (997.7) (1,012.4) (882.7) (119.1) (118.4)
EBITDA 663.9 664.2 649.1 643.0 14.8 21.2
Costs related to voluntary leave schemes 28.6 26.6 28.6 26.2 - 0.4
Other restructuring costs - 0.8 - - - 0.8
Adjusted EBITDA 692.5 691.6 677.7 669.2 14.8 22.4
Amortization of lessee use rights to leased assets (34.9) (38.3) (24.0) (25.3) (10.9) (13.0)
Interest expense on leases (4.9) (4.5) (3.7) (3.4) (1.2) (1.1)
Adjusted EBITDA (AL) 652.7 648.8 650.0 640.5 2.7 8.3
margin % 36.5% 39.1% 39.2% 42.1% 2.0% 6.0%
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) Q2'24 Q2'23 6M'24 6M'23
Purchase of property plant and equipment and intangible assets - Capex (156.1) (166.7) (273.6) (246.6)
Spectrum Payments - - - -
Adjusted CAPEX (156.1) (166.7) (273.6) (246.6)
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) Q2'24 Q2'23 6M'24 6M'23
Net cash flows from operating activities 289.8 331.2 550.0 654.3
Purchase of property, plant, equipment and intangible assets (156.1) (166.7) (273.6) (246.6)
Interest received 4.0 3.3 7.4 5.3
Free Cash Flow 137.7 167.8 283.8 413.0
Lease repayments (16.5) (23.8) (35.5) (42.9)
Free Cash Flow After Lease (AL) 121.2 144.0 248.3 370.1
Payment for voluntary leave schemes 24.1 2.9 26.3 5.0
Payment for other restructuring costs 0.6 1.0 1.3 1.6
Spectrum payments - - - -
Adjusted FCF After Lease (AL) 145.9 147.9 275.9 376.7
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 2024 and the comparable period of
2023, Profit to owners of the parent was impacted by costs related to
voluntary leave schemes and other restructuring costs.
OTE Group (€ mn) Q2'24 Q2'23 6M'24 6M'23
Profit to owners of the Parent 125.9 111.9 260.7 247.2
Costs related to voluntary leave schemes 14.6 20.3 22.3 20.8
Other restructuring costs - 0.8 - 0.8
Adjusted Profit to owners of the parent 140.5 133.0 283.0 268.8
II. ΟΤΕ GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(€ mn) 30/06/2024 31/12/2023
ASSETS
Non - current assets
Property, plant and equipment 2,227.5 2,188.3
Right-of-use assets 260.0 258.4
Goodwill 376.6 376.6
Telecommunication licenses 247.9 264.0
Other intangible assets 300.3 263.1
Investments 0.1 0.1
Loans to pension funds 58.6 60.7
Deferred tax assets 184.6 185.0
Contract costs 26.7 28.7
Other non-current assets 76.3 77.3
Total non - current assets 3,758.6 3,702.2
Current assets
Inventories 61.1 58.9
Trade receivables 607.9 537.6
Other financial assets 6.8 5.6
Contract assets 69.8 63.9
Other current assets 122.0 103.7
Restricted cash 0.7 0.6
Cash and cash equivalents 686.0 463.9
Total current assets 1,554.3 1,234.2
TOTAL ASSETS 5,312.9 4,936.4
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Share capital 1,182.9 1,182.9
Share premium 422.7 422.8
Treasury shares (89.3) (25.3)
Statutory reserve 440.7 440.7
Foreign exchange and other reserves (143.9) (148.2)
Retained earnings 34.3 70.4
Total equity attributable to owners of the Parent 1,847.4 1,943.3
Non-controlling interests 0.5 0.5
Total equity 1,847.9 1,943.8
Non-current liabilities
Long-term borrowings 848.1 847.7
Provision for staff retirement indemnities 95.0 107.0
Provision for youth account 72.4 75.9
Contract liabilities 85.9 84.9
Lease liabilities 183.6 184.9
Deferred tax liabilities 0.4 0.4
Other non - current liabilities 78.7 43.0
Total non - current liabilities 1,364.1 1,343.8
Current liabilities
Trade accounts payable 884.4 866.4
Short-term borrowings 40.0 -
Income tax payable 121.8 95.2
Contract liabilities 225.6 223.9
Lease liabilities 64.4 60.8
Dividends payable 299.3 2.5
Other current liabilities 465.4 400.0
Total current liabilities 2,100.9 1,648.8
TOTAL EQUITY AND LIABILITIES 5,312.9 4,936.4
III. OTE GROUP CONSOLIDATED INCOME STATEMENT
(€ mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Fixed business:
Retail services revenues 227.5 227.6 0.0% 456.6 456.8 0.0%
Wholesale services revenues 164.3 148.9 +10.3% 313.3 273.7 +14.5%
Other revenues 111.3 86.1 +29.3% 223.5 160.8 +39.0%
Total revenues from fixed business 503.1 462.6 +8.8% 993.4 891.3 +11.5%
Mobile business:
Service revenues 295.7 294.5 +0.4% 577.8 577.8 0.0%
Handset revenues 77.0 68.1 +13.1% 150.4 134.1 +12.2%
Other revenues 5.9 4.0 +47.5% 10.7 7.7 +39.0%
Total revenues from mobile business 378.6 366.6 +3.3% 738.9 719.6 +2.7%
Miscellaneous other revenues 29.0 24.9 +16.5% 56.0 46.8 +19.7%
Total revenues 910.7 854.1 +6.6% 1,788.3 1,657.7 +7.9%
Other operating income 0.4 2.3 -82.6% 4.0 4.2 -4.8%
Operating expenses
Interconnection and roaming costs (130.9) (115.4) +13.4% (243.2) (205.0) +18.6%
Provision for expected credit losses (10.2) (9.9) +3.0% (18.7) (18.9) -1.1%
Personnel costs (103.8) (108.3) -4.2% (207.4) (218.1) -4.9%
Costs related to voluntary leave schemes (18.7) (26.0) -28.1% (28.6) (26.6) +7.5%
Commission costs (23.0) (21.8) +5.5% (46.6) (42.8) +8.9%
Merchandise costs (92.4) (78.1) +18.3% (194.6) (157.7) +23.4%
Maintenance and repairs (23.4) (23.3) +0.4% (44.2) (44.2) 0.0%
Marketing (19.0) (16.1) +18.0% (34.2) (30.3) +12.9%
Other operating expenses (164.6) (135.2) +21.7% (310.9) (254.1) +22.4%
Total operating expenses before depreciation, amortization and impairment (586.0) (534.1) +9.7% (1,128.4) (997.7) +13.1%
Operating profit before financial and investing activities, depreciation, 325.1 322.3 +0.9% 663.9 664.2 0.0%
amortization and impairment
Depreciation, amortization and impairment (154.0) (171.1) -10.0% (310.6) (331.8) -6.4%
Operating profit before financial and investing activities 171.1 151.2 +13.2% 353.3 332.4 +6.3%
Income and expense from financial and investing activities
Finance income and costs (3.1) (5.3) -41.5% (7.4) (11.2) -33.9%
Foreign exchange differences, net 0.4 1.7 -76.5% 0.5 1.9 -73.7%
Gains / (losses) from investments and other financial assets - Impairment - 0.4 - 0.3 0.6 -50.0%
Total loss from financial and investing activities (2.7) (3.2) -15.6% (6.6) (8.7) -24.1%
Profit before tax 168.4 148.0 +13.8% 346.7 323.7 +7.1%
Income tax (42.5) (36.1) +17.7% (86.0) (76.5) +12.4%
Profit for the period 125.9 111.9 +12.5% 260.7 247.2 +5.5%
Attributable to:
Owners of the parent 125.9 111.9 +12.5% 260.7 247.2 +5.5%
Non-controlling interests - - - - - -
IV. GROUP CONSOLIDATED STATEMENT OF CASH FLOW
(€ mn) Q2'24 Q2'23 y-o-y 6M'24 6M'23 y-o-y
Cash flows from operating activities
Profit before tax 168.4 148.0 +13.8% 346.7 323.7 +7.1%
Adjustments for:
Depreciation, amortization and impairment 154.0 171.1 -10.0% 310.6 331.8 -6.4%
Costs related to voluntary leave schemes 18.7 26.0 -28.1% 28.6 26.6 +7.5%
Provision for staff retirement indemnities 0.5 0.4 +25.0% 1.0 (3.8) -
Provision for youth account - (2.6) - - (2.4) -
Foreign exchange differences, net (0.4) (1.7) -76.5% (0.5) (1.9) -73.7%
(Gains) / losses from investments and other financial assets- Impairment - (0.4) - (0.3) (0.6) -50.0%
Finance costs, net 3.1 5.3 -41.5% 7.4 11.2 -33.9%
Working capital adjustments: (16.7) (1.4) - (42.1) (22.1) +90.5%
Decrease / (increase) in inventories 0.6 6.9 -91.3% (2.2) 1.2 -
Decrease / (increase) in receivables (45.1) (37.6) +19.9% (96.4) (47.4) +103.4%
(Decrease) / increase in liabilities (except borrowings) 27.8 29.3 -5.1% 56.5 24.1 +134.4%
Payment for voluntary leave schemes (24.1) (2.9) - (26.3) (5.0) -
Payment of staff retirement indemnities and youth account, net of employees' (4.9) (2.8) +75.0% (6.7) (4.6) +45.7%
contributions
Interest and related expenses paid (except leases) (3.4) (4.5) -24.4% (6.2) (8.6) -27.9%
Interest paid for leases (2.1) (2.2) -4.5% (4.9) (4.5) +8.9%
Income tax (paid)/received (3.3) (1.1) - (57.3) 14.5 -
Net cash flows from operating activities 289.8 331.2 -12.5% 550.0 654.3 -15.9%
Cash flows from investing activities
Purchase of financial assets (0.3) (0.1) - (0.3) (0.7) -57.1%
Payments related to disposal of subsidiaries/investments (0.1) - - (8.7) - -
Repayment of loans receivable 1.8 1.8 - 3.6 3.6 -
Purchase of property, plant and equipment and intangible assets (156.1) (166.7) -6.4% (273.6) (246.6) +10.9%
Movement in restricted cash - (0.1) - - (0.1) -
Interest received 4.0 3.3 +21.2% 7.4 5.3 +39.6%
Net cash flows used in investing activities (150.7) (161.8) -6.9% (271.6) (238.5) +13.9%
Cash flows from financing activities
Acquisition of treasury shares (46.3) (39.1) +18.4% (62.3) (59.1) +5.4%
Proceeds from loans 40.0 80.0 -50.0% 40.0 80.0 -50.0%
Repayment of loans - (150.0) - - (161.5) -
Lease repayments (16.5) (23.8) -30.7% (35.5) (42.9) -17.2%
Financial liabilities related to digital wallets 1.7 0.5 - 1.6 (1.0) -
Dividends paid to Company's owners - (0.2) - - (0.2) -
Net cash flows used in financing activities (21.1) (132.6) -84.1% (56.2) (184.7) -69.6%
Net increase/ (decrease) in cash and cash equivalents 118.0 36.8 - 222.2 231.1 -3.9%
Cash and cash equivalents, at the beginning of the period 567.8 784.3 -27.6% 463.9 590.1 -21.4%
Net foreign exchange differences 0.2 - - (0.1) (0.1) -
Cash and cash equivalents, at the end of the period 686.0 821.1 -16.5% 686.0 821.1 -16.5%
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