Hellenic Telecom.Organization S.A. reports 3.8% EBITDA growth and 1.1 pp EBITDA Margin growth from 31.3% to 32.4%
02 Mar 2017 • About Hellenic Telecom.Organization S.A. (
$OTES) • By InTwits
Hellenic Telecom.Organization S.A. reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hellenic Telecom.Organization S.A. has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.1%. At the same time it's in pair with industry average of 14.2%.
- CAPEX is quite volatile: 187 in 2016, 208 in 2015, 293 in 2014, 397 in 2013, 445 in 2012
- The company has business model with low profitability: ROIC is at 7.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hellenic Telecom.Organization S.A. ($OTES) key annual financial indicators
| mln. € | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,360 | 4,096 | 3,918 | 3,903 | 3,908 | 0.1% |
| SG&A | 913 | 841 | 841 | 852 | 882 | 3.5% |
| EBITDA | 1,393 | 1,178 | 1,386 | 1,221 | 1,267 | 3.8% |
| Net Income | 472 | 317 | 267 | 152 | 140 | -7.8% |
Balance Sheet
|
|---|
| Cash | 1,162 | 1,444 | 1,510 | 1,323 | 1,586 | 19.9% |
| Short Term Debt | 1,416 | 400 | 465 | 434 | 184 | -57.5% |
| Long Term Debt | 2,635 | 2,557 | 2,173 | 1,756 | 1,941 | 10.6% |
Cash flow
|
|---|
| Capex | 508 | 605 | 604 | 658 | 653 | -0.8% |
Ratios
|
|---|
| Revenue growth | -13.5% | -6.0% | -4.3% | -0.4% | 0.1% | |
| EBITDA growth | -16.2% | -15.4% | 17.6% | -11.9% | 3.8% | |
| EBITDA Margin | 32.0% | 28.8% | 35.4% | 31.3% | 32.4% | 1.1% |
| Net Income Margin | 10.8% | 7.7% | 6.8% | 3.9% | 3.6% | -0.3% |
| SG&A, % of revenue | 20.9% | 20.5% | 21.5% | 21.8% | 22.6% | 0.7% |
| CAPEX, % of revenue | 11.7% | 14.8% | 15.4% | 16.9% | 16.7% | -0.2% |
| ROIC | 8.2% | 5.4% | 10.4% | 7.1% | 7.1% | 0.0% |
| ROE | 31.6% | 18.0% | 13.2% | 6.9% | 6.1% | -0.9% |
| Net Debt/EBITDA | 2.1x | 1.3x | 0.8x | 0.7x | 0.4x | -0.3x |
Revenue and profitability
The company's Revenue showed almost no change in 2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.1 pp from 31.3% to 32.4% in 2016.
SG&A as a % of Revenue increased slightly on 0.73 pp from 21.8% to 22.6% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 16.7% in 2016. CAPEX/Revenue increased slightly on 1.9 pp from 14.8% in 2013 to 16.7% in 2016. It's average CAPEX/Revenue for the last three years was 16.3%.Hellenic Telecom.Organization S.A. invested a large share of EBITDA (51.5%) to CAPEX.
Return on investment
The company operates at low ROIC (7.15%) and ROE (6.07%). ROIC showed almost no change in 2016. ROE decreased slightly on 0.87 pp from 6.9% to 6.1% in 2016.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 0.7x to 0.4x in 2016. Debt decreased on 2.9% in 2016 while cash surged on 19.9% in 2016.
Valuation
Hellenic Telecom.Organization S.A.'s trades at EV/EBITDA 0.5x and P/E 0.3x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 1.0x with the industry average at 19.0x.
Appendix 1: Peers in Fixed Line Telecommunications
Below you can find Hellenic Telecom.Organization S.A. benchmarking vs. other companies in Fixed Line Telecommunications industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | | -8.5% | -23.8% | 26.4% | -5.2% |
| Alternative Networks ($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 ($VZC) | | 4.1% | 5.4% | 3.6% | -4.3% |
| |
|---|
| Median (13 companies) | 1.6% | -1.6% | -0.8% | 0.0% | -1.1% |
|---|
| Hellenic Telecom.Organization S.A. ($OTES) | | -6.0% | -4.3% | -0.4% | 0.1% |
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 ($0O8F) | 35.9% | 34.1% | 39.1% | 33.2% | 35.7% |
| |
|---|
| Median (13 companies) | 34.0% | 33.1% | 31.7% | 29.1% | 28.3% |
|---|
| Hellenic Telecom.Organization S.A. ($OTES) | 32.0% | 28.8% | 35.4% | 31.3% | 32.4% |
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% | 17.7% |
| Orange Polska Sa ($OPLD) | 16.6% | 16.9% | 17.6% | 16.9% | 44.8% |
| |
|---|
| Median (13 companies) | 13.6% | 13.7% | 12.9% | 14.0% | 13.2% |
|---|
| Hellenic Telecom.Organization S.A. ($OTES) | 11.7% | 14.8% | 15.4% | 16.9% | 16.7% |
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 ($O2CZ) | 11.8% | 11.7% | 7.2% | 14.5% | 26.8% |
| |
|---|
| Median (13 companies) | 11.2% | 9.7% | 7.7% | 8.2% | 12.0% |
|---|
| Hellenic Telecom.Organization S.A. ($OTES) | 8.2% | 5.4% | 10.4% | 7.1% | 7.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Telefonica Sa ($TDE) | 2.5x | 2.5x | 3.6x | 4.2x | 3.6x |
| 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) | 1.6x | 1.1x | 1.6x | 1.3x | 1.9x |
|---|
| Hellenic Telecom.Organization S.A. ($OTES) | 2.1x | 1.3x | 0.8x | 0.7x | 0.4x |
