O2 Czech Republic As reports 22.7% Net Income decline and 2.4 pp EBITDA Margin decline from 29.9% to 27.4%
31 Jan 2017 • About O2 Czech Republic As (
$O2CZ) • By InTwits
O2 Czech Republic As reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- O2 Czech Republic As has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.8%. At the same time it's a lot of higher than industry average of 2.0%.
- CAPEX is quite volatile: 1,510 in 2016, 1,701 in 2015, 2,727 in 2014, 5,584 in 2013, 5,671 in 2012
- The company has highly profitable business model: ROIC is at 26.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
O2 Czech Republic As ($O2CZ) key annual financial indicators
| mln. CZK | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 50,534 | 47,895 | 37,372 | 37,385 | 37,522 | 0.4% |
| EBITDA | 19,781 | 18,477 | 15,333 | 11,160 | 10,299 | -7.7% |
| Net Income | 6,776 | 5,695 | 3,998 | 6,799 | 5,259 | -22.7% |
Balance Sheet
|
|---|
| Cash | 3,044 | 3,890 | 3,256 | 1,970 | 4,137 | 110.0% |
| Short Term Debt | 31 | 4 | 4,004 | 11 | 1 | -90.9% |
| Long Term Debt | 3,000 | 3,000 | 3,000 | 2,970 | 6,976 | 134.9% |
Cash flow
|
|---|
| Capex | 5,671 | 5,584 | 2,727 | 1,701 | 1,510 | -11.2% |
Ratios
|
|---|
| Revenue growth | -3.5% | -5.2% | -22.0% | 0.0% | 0.4% | |
| EBITDA growth | -9.2% | -6.6% | -17.0% | -27.2% | -7.7% | |
| EBITDA Margin | 39.1% | 38.6% | 41.0% | 29.9% | 27.4% | -2.4% |
| Net Income Margin | 13.4% | 11.9% | 10.7% | 18.2% | 14.0% | -4.2% |
| CAPEX, % of revenue | 11.2% | 11.7% | 7.3% | 4.5% | 4.0% | -0.5% |
| ROIC | 11.8% | 11.7% | 7.2% | 14.5% | 26.8% | 12.3% |
| ROE | 10.5% | 9.8% | 7.3% | 18.8% | 29.3% | 10.6% |
| Net Debt/EBITDA | -0.0x | -0.0x | 0.2x | 0.1x | 0.3x | 0.2x |
Revenue and profitability
The company's Revenue showed almost no change in 2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.90 pp from 8.4% to 9.3% in FY2016.
Net Income marign decreased on 4.2 pp from 18.2% to 14.0% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.0% in 2016. CAPEX/Revenue decreased on 7.6 pp from 11.7% in 2013 to 4.0% in 2016. Average CAPEX/Revenue for the last three years was 5.3%.
Return on investment
The company operates at high and attractive ROIC (26.79%) and ROE (29.34%). ROIC jumped on 12.3 pp from 14.5% to 26.8% in 2016. ROE jumped on 10.6 pp from 18.8% to 29.3% in 2016.
Leverage (Debt)
Debt level is 0.3x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 0.1x to 0.3x in 2016. Debt surged on 134% in 2016 while cash jumped on 110% in 2016.
Appendix 1: Peers in Fixed Line Telecommunications
Below we provide O2 Czech Republic As benchmarking against other companies in Fixed Line Telecommunications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | -0.8% | -8.5% | -23.8% | 26.4% | |
| Alternative Networks ($AN.) | | -0.4% | 17.5% | 9.2% | -7.5% |
| Syqic ($SYQ) | 37.6% | 20.5% | 126.5% | 9.2% | |
| Adept Telecom ($ADT) | | -4.1% | -0.8% | 5.8% | 30.9% |
| Verizon Communications Inc ($VZC) | | 4.1% | 5.4% | 3.6% | -4.3% |
| |
|---|
| Median (13 companies) | -0.5% | -1.6% | -0.8% | -0.4% | 1.1% |
|---|
| O2 Czech Republic As ($O2CZ) | | -5.2% | -22.0% | 0.0% | 0.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kt Corp ($KTCD) | 75.5% | 76.0% | 77.9% | 77.9% | |
| Verizon Communications Inc ($VZC) | 60.1% | 62.8% | 60.7% | 60.1% | 59.2% |
| Telecom Egypt ($TEEG) | 41.4% | 41.9% | 44.2% | 41.6% | |
| Alternative Networks ($AN.) | 39.0% | 39.2% | 41.2% | 41.3% | 40.9% |
| Syqic ($SYQ) | 57.3% | 59.9% | 43.6% | 41.2% | |
| |
|---|
| Median (6 companies) | 49.4% | 50.9% | 43.9% | 41.5% | 40.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ooredoo Qsc ($ORDS) | 46.0% | 42.4% | 37.6% | 39.2% | 44.8% |
| Verizon Communications Inc ($VZC) | 25.6% | 40.3% | 28.4% | 37.3% | 34.1% |
| BT Group ($BT.A) | 31.2% | 32.0% | 31.9% | 33.5% | 33.4% |
| Rostelekom ($RKMD) | 39.7% | 39.0% | 33.0% | 33.4% | |
| Koninklijke Kpn Nv ($0O8F) | 35.9% | 34.1% | 39.1% | 33.2% | |
| |
|---|
| Median (13 companies) | 32.0% | 32.0% | 31.7% | 29.1% | 33.4% |
|---|
| O2 Czech Republic As ($O2CZ) | 39.1% | 38.6% | 41.0% | 29.9% | 27.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ooredoo Qsc ($ORDS) | 21.9% | 27.5% | 25.3% | 26.5% | 17.2% |
| Telecom Egypt ($TEEG) | 5.1% | 6.8% | 13.0% | 21.4% | |
| Rostelekom ($RKMD) | 31.7% | 23.6% | 19.3% | 21.1% | |
| Telefonica Sa ($TDE) | 15.2% | 17.0% | 19.1% | 18.7% | |
| Orange Polska Sa ($OPLD) | 16.6% | 16.9% | 17.6% | 16.9% | |
| |
|---|
| Median (13 companies) | 13.6% | 13.8% | 13.0% | 14.4% | 13.0% |
|---|
| O2 Czech Republic As ($O2CZ) | 11.2% | 11.7% | 7.3% | 4.5% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BT Group ($BT.A) | 23.6% | 27.0% | 34.7% | 37.5% | 21.6% |
| Syqic ($SYQ) | 38.9% | 3.2% | 33.9% | 22.9% | |
| Alternative Networks ($AN.) | 35.2% | 33.7% | 28.5% | 20.2% | 15.2% |
| Verizon Communications Inc ($VZC) | 8.0% | 16.7% | 10.1% | 19.3% | 15.4% |
| Adept Telecom ($ADT) | 11.6% | 15.5% | 13.2% | 14.3% | 16.4% |
| |
|---|
| Median (13 companies) | 9.6% | 8.5% | 8.7% | 7.1% | 15.4% |
|---|
| O2 Czech Republic As ($O2CZ) | 11.8% | 11.7% | 7.2% | 14.5% | 26.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | 2.5x | 2.5x | 3.6x | 4.2x | |
| Koninklijke Kpn Nv ($0O8F) | 3.8x | 3.4x | 3.0x | 3.6x | |
| Verizon Communications Inc ($VZC) | 1.7x | 0.8x | 2.8x | 2.1x | 2.4x |
| Ooredoo Qsc ($ORDS) | 1.6x | 1.7x | 2.0x | 2.0x | 1.7x |
| Rostelekom ($RKMD) | 1.7x | 1.8x | 1.8x | 1.8x | |
| |
|---|
| Median (13 companies) | 1.7x | 1.3x | 1.6x | 1.3x | 1.7x |
|---|
| O2 Czech Republic As ($O2CZ) | -0.0x | -0.0x | 0.2x | 0.1x | 0.3x |
