O2 Czech Republic As EBITDA increased on 5.7% and EBITDA Margin increased slightly on 1.1 pp from 28.0% to 29.1%
27 Jan 2020 • About O2 Czech Republic As (
$O2CZ) • By InTwits
O2 Czech Republic As reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- O2 Czech Republic As has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: ₹1,296m in 2019, ₹609m in 2018, ₹957m in 2017, ₹2,223m in 2016, ₹1,367m in 2015
- The company has highly profitable business model: ROIC is 23.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 1.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 18.7% to 22.2% in 2019. During the last 5 years EBITDA Margin bottomed in FY2016 at 27.3% and was growing since that time.
Gross Margin increased slightly on 1.4 pp from 49.9% to 51.3% in FY2019.
Net Income margin showed almost no change in FY2019.
Investments (CAPEX, working capital and M&A)
O2 Czech Republic As's CAPEX/Revenue was 4.1% in FY2019. CAPEX/Revenue showed almost no change from FY2016 to FY2019. It's average CAPEX/Revenue for the last three years was 4.3%.
Return on investment
The company operates at high and attractive ROIC (23.2%) and ROE (37.2%). ROIC decreased slightly on 1.1 pp from 24.3% to 23.2% in FY2019. ROE increased slightly on 1.7 pp from 35.5% to 37.2% in FY2019. During the last 5 years ROIC topped in FY2016 at 26.8% and was declining since that time. ROE followed a growing trend at 4.3 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.1x and Debt / EBITDA is 1.7x. Net Debt / EBITDA jumped on 0.4x from 0.8x to 1.1x in FY2019. Debt jumped on 78.7% while cash surged on 142%. Net Debt/EBITDA stuck to a growing trend at 0.3x per annum in FY2015-FY2019.
O2 Czech Republic As has short term refinancing risk: cash is only 77.2% of short term debt.
Management team
The company's CEO is Jindrich Fremuth. Jindrich Fremuth is a founder and has 2 years tenure with the company. Tomas Kouril is a O2 Czech Republic As's CFO. Tomas Kouril has spent 5 years at the company.
Financial and operational results
FY ended 30 Nov -0001
O2 Czech Republic As ($O2CZ) key annual financial indicators| mln. CZK | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 37,385 | 37,730 | 37,855 | 38,203 | 38,838 | 1.7% |
| Gross Profit | | 18,300 | 18,432 | 19,074 | 19,943 | 4.6% |
| EBITDA | 11,160 | 10,299 | 10,506 | 10,681 | 11,293 | 5.7% |
| EBIT | | | | 7,108 | | |
| Interest expence | | | | 187 | | |
| Tax | | | | 1,468 | | |
| Net Income | 6,799 | 5,259 | 5,592 | 5,450 | 5,460 | 0.2% |
Balance Sheet
|
|---|
| Cash | 1,970 | 4,137 | 4,088 | 2,475 | 5,989 | 142.0% |
| Inventory | | | | 906 | | |
| Short Term Debt | 11 | 1 | 37 | 38 | 7,759 | 20,318.4% |
| Long Term Debt | 2,970 | 6,976 | 10,448 | 10,461 | 11,005 | 5.2% |
Cash flow
|
|---|
| Capex | 1,701 | 1,510 | 1,914 | 1,479 | 1,589 | 7.4% |
| Dividends | | | | 6,332 | | |
| Acquisitions | | | | 2 | | |
Ratios
|
|---|
| Revenue growth | -0.8% | 0.9% | 0.3% | 0.9% | 1.7% | |
| EBITDA growth | -27.2% | -7.7% | 2.0% | 1.7% | 5.7% | |
|
|---|
| Gross Margin | | 48.5% | 48.7% | 49.9% | 51.3% | 1.4% |
| EBITDA Margin | 29.9% | 27.3% | 27.8% | 28.0% | 29.1% | 1.1% |
| EBIT Margin | | | | 18.6% | |
| Net Income Margin | 18.2% | 13.9% | 14.8% | 14.3% | 14.1% | -0.2% |
| CAPEX, % of revenue | 4.5% | 4.0% | 5.1% | 3.9% | 4.1% | 0.2% |
|
|---|
| ROIC | 14.5% | 26.8% | 25.8% | 24.3% | 23.2% | -1.1% |
| ROE | 18.8% | 29.3% | 33.9% | 35.5% | 37.2% | 1.7% |
| Net Debt/EBITDA | 0.1x | 0.3x | 0.6x | 0.8x | 1.1x | 0.4x |
| Interest expence / Average debt | | | | 1.8% | | |
People
|
|---|
| Employees | | | | 5,338 | | |
| Revenue/Employee, th. CZK | | | | 7,157 | | |
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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Adept Telecom ($ADT) | 5.8% | 30.9% | 19.2% | 34.8% | |
| Verizon Communications Inc ($VZC) | 3.6% | -4.3% | 0.0% | 3.8% | |
| Kt Corp ($KTCD) | -4.9% | 2.1% | 2.8% | 0.3% | |
| BT Group ($BT.A) | -1.7% | 5.7% | 26.6% | -1.4% | |
| Orange Polska Sa ($OPLD) | -3.0% | -2.6% | -1.4% | -2.5% | |
| |
|---|
| Median (6 companies) | -0.4% | 0.1% | 0.7% | -0.5% | |
|---|
| O2 Czech Republic As ($O2CZ) | | 0.9% | 0.3% | 0.9% | 1.7% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Kt Corp ($KTCD) | 77.9% | 78.5% | 83.5% | 83.0% | |
| Verizon Communications Inc ($VZC) | 60.1% | 59.2% | 59.1% | 57.6% | |
| Adept Telecom ($ADT) | 37.6% | 40.3% | 42.3% | 49.4% | |
| |
|---|
| Median (3 companies) | 41.5% | 51.2% | 59.1% | 57.6% | |
|---|
| O2 Czech Republic As ($O2CZ) | | 48.5% | 48.7% | 49.9% | 51.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ooredoo Qsc ($ORDS) | 39.2% | 39.2% | 40.5% | 36.9% | |
| Verizon Communications Inc ($VZC) | 37.3% | 34.1% | 35.2% | 30.3% | |
| BT Group ($BT.A) | 33.5% | 32.8% | 28.0% | 29.1% | |
| Orange Polska Sa ($OPLD) | 29.1% | 11.9% | 24.6% | 26.0% | |
| Adept Telecom ($ADT) | 20.8% | 20.0% | 20.6% | 22.0% | |
| |
|---|
| Median (6 companies) | 29.1% | 30.6% | 31.0% | 27.5% | |
|---|
| O2 Czech Republic As ($O2CZ) | 29.9% | 27.3% | 27.8% | 28.0% | 29.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Orange Polska Sa ($OPLD) | 16.9% | 44.8% | 17.0% | 20.6% | |
| Ooredoo Qsc ($ORDS) | 26.5% | 17.6% | 11.6% | 15.6% | |
| BT Group ($BT.A) | 13.4% | 12.8% | 13.1% | 14.2% | |
| Verizon Communications Inc ($VZC) | 13.5% | 13.5% | 13.7% | 12.7% | |
| Kt Corp ($KTCD) | 14.0% | 12.2% | 10.4% | 9.6% | |
| |
|---|
| Median (6 companies) | 14.4% | 15.1% | 13.7% | 13.5% | |
|---|
| O2 Czech Republic As ($O2CZ) | 4.5% | 4.0% | 5.1% | 3.9% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| BT Group ($BT.A) | 37.5% | 20.7% | 13.9% | 15.4% | |
| Adept Telecom ($ADT) | 14.3% | 16.5% | 14.2% | 14.1% | |
| Verizon Communications Inc ($VZC) | 19.3% | 15.4% | 14.8% | 11.3% | |
| Kt Corp ($KTCD) | 5.7% | 6.9% | 6.7% | 6.0% | |
| Ooredoo Qsc ($ORDS) | 6.4% | 6.1% | 6.9% | 4.4% | |
| |
|---|
| Median (11 companies) | 7.1% | 7.1% | 7.9% | 8.7% | |
|---|
| O2 Czech Republic As ($O2CZ) | 14.5% | 26.8% | 25.8% | 24.3% | 23.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Verizon Communications Inc ($VZC) | 2.1x | 2.4x | 2.6x | 2.8x | |
| Orange Polska Sa ($OPLD) | 1.2x | 5.1x | 2.3x | 2.4x | |
| Adept Telecom ($ADT) | 0.3x | 1.0x | 2.2x | 2.3x | |
| BT Group ($BT.A) | 1.6x | 2.2x | 1.8x | 2.0x | |
| Ooredoo Qsc ($ORDS) | 2.0x | 2.0x | 1.6x | 1.8x | |
| |
|---|
| Median (6 companies) | 1.3x | 1.9x | 2.0x | 2.2x | |
|---|
| O2 Czech Republic As ($O2CZ) | 0.1x | 0.3x | 0.6x | 0.8x | 1.1x |
