Orange Polska Sa CAPEX surged on 159% in 2016 while Revenue decreased on 2.6%
13 Feb 2017 • About Orange Polska Sa (
$OPLD) • By InTwits
Orange Polska Sa reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Orange Polska Sa is a company in decline: 2016 revenue growth was -2.6%, 5 years revenue CAGR was -5.0%
- Orange Polska Sa has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.6%. At the same time it's a lot of higher than industry average of 14.2%.
- CAPEX is quite volatile: 5,169 in 2016, 1,998 in 2015, 2,153 in 2014, 2,180 in 2013, 2,344 in 2012
- The company has unprofitable business model: ROIC is at -8.6%
- It operates with high leverage: Net Debt/EBITDA is 5.1x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Orange Polska Sa ($OPLD) key annual financial indicators
| mln. PLN | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,141 | 12,923 | 12,212 | 11,840 | 11,538 | -2.6% |
| EBITDA | 4,853 | 3,895 | 4,059 | 3,443 | 1,371 | -60.2% |
| Net Income | 855 | 294 | 535 | 254 | -1,746 | -787.4% |
Balance Sheet
|
|---|
| Cash | 406 | 198 | 248 | 266 | 262 | -1.5% |
| Short Term Debt | 2,195 | 3,343 | 1,143 | 1,318 | 41 | -96.9% |
| Long Term Debt | 2,990 | 1,236 | 3,288 | 2,930 | 7,153 | 144.1% |
Cash flow
|
|---|
| Capex | 2,344 | 2,180 | 2,153 | 1,998 | 5,169 | 158.7% |
Ratios
|
|---|
| Revenue growth | -5.2% | -8.6% | -5.5% | -3.0% | -2.6% | |
| EBITDA growth | -17.0% | -19.7% | 4.2% | -15.2% | -60.2% | |
| EBITDA Margin | 34.3% | 30.1% | 33.2% | 29.1% | 11.9% | -17.2% |
| Net Income Margin | 6.0% | 2.3% | 4.4% | 2.1% | -15.1% | -17.3% |
| CAPEX, % of revenue | 16.6% | 16.9% | 17.6% | 16.9% | 44.8% | 27.9% |
| ROIC | 8.9% | 4.7% | 6.1% | 3.7% | -8.6% | -12.3% |
| ROE | 6.3% | 2.3% | 4.3% | 2.1% | -15.9% | -18.0% |
| Net Debt/EBITDA | 1.0x | 1.1x | 1.0x | 1.2x | 5.1x | 3.9x |
Revenue and profitability
Orange Polska Sa's Revenue decreased on 2.6% in 2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 17.2 pp from 29.1% to 11.9% in 2016.
Net Income marign dropped on 17.3 pp from 2.1% to -15.1% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 44.8% in 2016. CAPEX/Revenue jumped on 27.9 pp from 16.9% in 2013 to 44.8% in 2016. Average CAPEX/Revenue for the last three years was 26.4%.The company has spent a lot to CAPEX (377% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-8.59%) and ROE (-15.89%). ROIC dropped on 12.3 pp from 3.7% to -8.6% in 2016. ROE dropped on 18.0 pp from 2.1% to -15.9% in 2016.
Leverage (Debt)
Debt level is 5.1x Net Debt / EBITDA and 5.2x Debt / EBITDA. Net Debt / EBITDA surged on 3.9x from 1.2x to 5.1x in 2016. Debt surged on 69.4% in 2016 while cash decreased slightly on 1.5% in 2016.
Appendix 1: Peers in Fixed Line Telecommunications
Below we provide Orange Polska Sa 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 ($VZC) | | 4.1% | 5.4% | 3.6% | -4.3% |
| |
|---|
| Median (13 companies) | -0.2% | -1.6% | -0.8% | 0.0% | 0.7% |
|---|
| Orange Polska Sa ($OPLD) | | -8.6% | -5.5% | -3.0% | -2.6% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kt Corp ($KTCD) | 75.5% | 76.0% | 77.9% | 77.9% | 78.5% |
| Verizon Communications Inc ($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 ($SYQ) | 57.3% | 59.9% | 43.6% | 41.2% | |
| |
|---|
| Median (6 companies) | 49.4% | 50.9% | 43.9% | 41.5% | 50.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ooredoo Qsc ($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 ($0O8F) | 35.9% | 34.1% | 39.1% | 33.2% | 35.7% |
| |
|---|
| Median (13 companies) | 32.0% | 33.1% | 31.7% | 29.9% | 30.4% |
|---|
| Orange Polska Sa ($OPLD) | 34.3% | 30.1% | 33.2% | 29.1% | 11.9% |
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% | |
| Hellenic Telecom.Organization S.A. ($OTES) | 11.7% | 14.8% | 15.4% | 16.9% | |
| |
|---|
| Median (13 companies) | 13.5% | 13.7% | 12.9% | 14.0% | 12.6% |
|---|
| Orange Polska Sa ($OPLD) | 16.6% | 16.9% | 17.6% | 16.9% | 44.8% |
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% |
| O2 Czech Republic As ($O2CZ) | 11.8% | 11.7% | 7.2% | 14.5% | 26.8% |
| |
|---|
| Median (13 companies) | 11.2% | 9.7% | 8.7% | 8.2% | 15.3% |
|---|
| Orange Polska Sa ($OPLD) | 8.9% | 4.7% | 6.1% | 3.7% | -8.6% |
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 ($0O8F) | 3.8x | 3.4x | 3.0x | 3.6x | 3.1x |
| Verizon Communications Inc ($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 | 1.4x |
|---|
| Orange Polska Sa ($OPLD) | 1.0x | 1.1x | 1.0x | 1.2x | 5.1x |
