Will the stock's fall finally stop?

The preliminary figures of UI (and IONOS) should allow their stocks to breathe a little. Although we remain worried about not seeing the group gain market share on mobile, the EBITDA margin (excluding the roll-out costs and excluding IONOS) should grow towards 25% in the coming years. Although EBITDA less capex should decrease from 7% of sales in 2022 to 4% in 2023, it could reach 15% of sales in a few years’ time. We maintain our Buy recommendation.

Higher cash-flow for 2022 does not change the situation

United Internet has raised its EBITDA guidance for 2022 from €1.26bn to €1.27bn. This increase is partly due to slightly lower expenses for the 1&1 network roll-out. Capex is also expected to be only €700m vs €900m previously, stemming from a shift in investments to 2023 due to a supply shortage at one of 1&1’s roll-out partners. We maintain our opinion at Buy on the stock which does not deserve to have lost 25% over the last two months.

Additional network roll out costs should lead to an improved margin

Q1 revenues were in line with the consensus, up by 3.7% yoy. EBITDA adjusted for 2021 one offs was up by 5.5% yoy. The group is becoming a “normal” telco with capex at 15% of sales: this means that, over the long term, its EBITDA margin will be closer to 30% than to 20% on the access activity. And ultimately EBITDA less capex could improve from 10% to 15% of sales. We maintain our opinion at Add.

Solid growth while building its 5G network

Q3 EBITDA was up by 8.8% yoy. It is in line with the ambitious target already given by management but very reassuring as the H1 EBITDA was up by only 2.1%. But the key point remains, indeed, 5G. This could not only boost mobile revenues but also the EBITDA margin beyond the 20% level. UI has found in Rakuten a strong partner for the construction of its 5G network. Thanks to Rakuten, UI should build an innovative “OpenRan” network.

A solid Q1 and still preparing for the future

A solid Q1, although the group confirmed 2021 should be a year of moderate growth. The group is indeed preparing for the future with good agreements on the mobile and fixed side with TEF Deutschland and DT. The stock price remains, however, at a correct price (at 7x the EBITDA), given a weak dividend due to its investment in building a 5G network. However, we are now back to Add as the stock has corrected by c.10% since mid-February.

Only slow growth in 2021 but the future looks bright

With the two agreements with Telefonica Deutschland and Deutsche Telekom, the group strengthens its fundamentals over the long term. The stock price remains, however, at its price (at 7.3x the EBITDA) if we stick to the short term as, for 2021, United Internet anticipates sales growth of only c.2.5% while EBITDA should increase by 3.5%.

EBITDA impacted as expected by TEF Deutschland's invoiced wholesale price increase

No real surprise in the Q3 figures of United Internet after the profit warning at the end of September. EBITDA declined by 12% yoy due to the invoiced wholesale price increase of Telefonica Deutschland which was at the heart of UI’s profit warning. We remain at Buy on the stock which is still at its price at the end of September.

Again, a profit warning

A bad surprise this weekend as UI released a communication regarding its negotiations with TEF Deutschland on its MVNO agreement. TEFD has maintained its high voice prices from July 2020 and the group is therefore revising sharply downward (by 7%) its EBITDA estimates for 2020.

Brief reminder of the H1 results released two weeks ago

The group released two weeks ago its H1 figures which were slightly better than expectations as the negative impact of COVID-19 was only 1% on revenues and 2% on EBITDA. The stock had, however, already recovered more than the ground lost since mid-March, nearly doubling to exceed slightly the €40 level (35% above the €30 level of the four months preceding the crisis). The stock seems now correctly valued and we are at Reduce on it.

Still a solid EBITDA growth for 2019 but maybe no... dividend

United Internet has eventually achieved its 2018 guidance with full-year revenues up by 10.1% yoy (pro forma excluding the consolidation of Strato and Drillisch) and an EBITDA at €1.2bn perfectly in line with the consensus and management’s objectives and up by 10.5% yoy pro forma. Note Q4 revenues and EBITDA were up by 9.7% and 10.6% respectively, two correct growth figures that put the slowdown recorded in Q3 into perspective. The outlook for 2019 is quite good. If the revenue growth is limite

Still solid organic growth

United Internet has released a correct Q3, although with growth numbers slightly lower than in H1. Q3 revenues have increased by 8.8% yoy in pro forma (vs 10.9% in H1) while EBITDA has grown by 6.6% yoy (vs 10.8% in H1). Remember that in reported terms both revenue and EBITDA growth during the first 9m were slightly above 25% due to the consolidation of Strato and Drillisch.

Takeover of Austria’s leading webhosting firm Word4You

United Internet AG has reached an agreement with Austrian webhosting company World4You concerning the 100% acquisition of the company by United Internet subsidiary 1&1 Internet SE. World4You is the leading webhoster in Austria and has over 100,000 customers. The move will strengthen the international activities of United Internet’s Business Applications segment pooled with 1&1 Internet SE, a company held jointly by United Internet (66.7%) and Warburg Pincus (33.3%).

On track to reach targets for 2018

Revenues in Q2 18 increased by 27.6% to €1.28bn compared to €1.00bn in Q2 17. On a pro forma basis, taking into account the consolidation of Strato and Drillisch, revenues grew 10.2%. EBITDA increased 32.4% to €287m in Q2 18 from €217m in the same period last year with a pro forma growth of 13.0%. The EBITDA margin increased slightly from 21.9% in Q2 17 to 22.5% in Q2 18 on a pro forma basis. EBIT grew by 19.8% to €191m in Q2 18 with the EBIT margin slightly improving against Q1 18 from 14.4% to

Tele Columbus – a takeover candidate for UI?!

The Vodafone Liberty Media deal will change the competitive landscape of cable network providers in Germany if the deal is approved by the regulators. United Internet is opposing the deal because of the dominant market positions of Deutsche Telekom and Vodafone. A takeover might be a valid option United Internet is the major shareholder of Tele Columbus with a stake of 28.52% in the company. In January 2016, UI acquired 9.8% in the company and, in February, 15.31% for a total of around €266.4

Growth driven by acquisitions

Revenues increased 33.4% to €1.27bn and excluding acquisitions 11.6% EBITDA increased 30.7% to €278.2m and excluding Strato and Drillisch 8.7% The EBITDA margin declined from 22.4% to 21.9% Net profit after discontinued operations and minorities declined 8.5% to €83.4m Minorities increased from €1.6m to €32.3m due to the 33% stake of Warburg Pincus in Business Applications and the 27% stake in Consumer Access

ARR guidance lifted; IFRS15 revenue adjustment

FY'22 was a formative year, as Bango's compelling platform licensing revenue model achieved meaningful scale and the execution began on the transformational DoCoMo deal. Platform Licensing Exit ARR rose to $5.0m (FY'21: $1.1m), whilst a record number of new merchants landed in the year (44, inc. McAfee, HBO, Paramount and others). Valuation materially understates the synergistic potential available from the DoCoMo deal in our view, whilst also overlooking value in the rapidly growing licensing b

New Forecasts: breaking through

With FY22 in line and no changes to our existing FY23 forecasts, our focus is on the introduction of new forecasts for FY24 and FY25. We model Clareti recurring revenue growth of 17% and 18% resp. With Clareti having broken through to positive cash EBITDA for the first time in its history in FY22, we expect operating leverage to drive significant margin expansion over the next three years and beyond (Gresham guides to 40% of ARR dropping through to cash EBITDA). We model cash EBITDA margins of 1

Hybridan Small Cap Feast - 23 Mar 23

23 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 06 Mar 23

6 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objective

Altitude Group (ALT LN) - New major contracts and FY23 ahead of expectations

Altitude has announced multiple new contracts in its Adjacent Markets Programmes (AMP) that are expected to have a significant impact on Group revenue. Zeus adjusted EBITDA forecasts are upgraded 11.9% in FY24 and 24.2% in FY25 to reflect this. The Group has also guided that FY23 adjusted EBITDA is expected to be above expectations (£1.70m), so we upgrade by 8.8% to £1.85m. Today’s contract wins and confident outlook statement provide further positive momentum. Altitude shares trade below our up

Morning Note – 27 March 2023

Sopheon - Results: Introducing InnovationOps

FY results to December 2022 are in line with the January trading update indicating exciting prospects. The significant strategic shift to SaaS for all new customers will lead to greater visibility and quality of earnings, and forecasts are unchanged save for changes to US tax assumptions in FY24. $24.3m of ARR at FY22 (+17% vs FY21 ) represents 64% of FY23 revenue expectations; total visibility of FY23 revenue stands at $28.4m, equivalent to 75% of FY expectations (this time last year was $25.1m

Hybridan Small Cap Feast - 21 Mar 23

21 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Looking through the fog

Tribal has provided a useful NTU update, suggesting that the two parties are working towards winding the contract down, albeit negotiations are still ongoing. While this is clearly not an optimal outcome, it nevertheless reduces uncertainty surrounding the stock and so should enable investors to focus on the core business, which continues to perform strongly – delivering +10% u/l ARR growth (despite the NTU loss). With a strong and sticky core market position and an increasingly international pr

Hybridan Small Cap Feast - 24 Mar 23

24 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

NTU update and change of reporting date

We learn today that Tribal has received notification that NTU has terminated its contract and reserved its rights to claim damages. Tribal meanwhile rejects this right to terminate and is considering its next steps. Furthermore - to accommodate this update, the company now expects to report results on 24th March. We therefore consider it is most appropriate to temporarily withdraw forecasts until we regain clarity over this situation and the most likely financial impact.

Hybridan Small Cap Feast - 16 Mar 23

16 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Hybridan Small Cap Feast - 20 Mar 23

20 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv

Blackbird plc - Finals

Blackbird plc has reported strong full-year results, with record revenue growth driven by its first ‘Powered by Blackbird’ (PBB) licencing deal with EVS, a €300m market-cap media group. EVS launched IPD-VIA Create in December 2022, its new web application developed in collaboration with Blackbird, which has already been deployed by a US broadcaster on a major global sporting event. This, and the continued roll-out by EVS, will translate into additional revenue for Blackbird through its revenue-s

Hybridan Small Cap Feast - 27 Mar 23

27 March 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectiv