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

Results driven by acquisitions

Revenues increased 10.5% to €4.2bn EBITDA margin excluding one-off items increased from 21.8% to 23.6% The number of fee-based customers jumped 36.3% or 6.1m to 22.89m (5.2% organically) Dividend increase from €0.80 to €0.85 per share In the current year, revenues are expected to reach €5.2bn and EBITDA €1.2bn

Q3`17 results dominated by Drillisch consolidation

In Q3`17, revenues increased 7.5% to €1.05bn and the gross margin improved from 33.6% to 38.2%. EBIT including extraordinary items of €303.9m jumped to €489.9m. Adjusted EBIT increased 12.9% to €186m. The EBIT margin improved from 16.8% to 17.6%. In the first nine months, revenues increased 6.4% to €3bn and, excluding consolidation effects of Strato/ProfitBricks €64.5m, Drillisch €54.6m, regulation €33.2m and negative currency effects of €6m, revenues increased 3.5%. Adjusted EBITDA increased

Cenkos: Healthcare Sector - Ward Round

Weekly round-up of AIM-listed healthcare news. Venture Life Group, GENinCode, Kromek, Alliance Pharma, Polarean Imaging, Benchmark Holdings, Ondine Biomedical, Verici Dx, Faron Pharmaceuticals, Avacta Group, Abingdon Health, Open Orphan, Belluscura, Hutchmed (China), Oxford Biodynamics

LIBERUM: Bango* - Agreement signed with global player

Guidance cut on a continuing higher return rate

Asos has cut its FY22 guidance as shoppers return more clothes amid inflationary pressure. The group also continues to work actively against the ongoing global supply chain challenges. The FY22 top-line is expected to grow between 4%-7% vs .10%-15% previously Adj. PBT will be in a range of £20m-£60m vs. £110m-£140m.

Capital Markets Day feedback

Cambridge Cognition held a very impressive CMD yesterday which showcased the group's Science and Technology capabilities.

Hybridan Small Cap Feast 28/06/2022

Joiners: No Joiners Today. Leavers: Raven Property Group has left the Main Market. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or req

Hybridan Small Cap Feast 16/06/2022

*A corporate client of Hybridan LLP Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends to join AIM. LifeSafe has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. At the cent

Hybridan Small Cap Feast 22/06/2022

Dish of the day Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety p

Contract Cancellation

Actual Experience has been notified by a Channel Partner that one of its customers, a leading energy supplier, will terminate its contract as of 18th August 2022. The contract was valued at £1m over 3 years, with £0.2m recognised in FY Sep21. ACT says that its continuing viability “will depend on securing more sales, the timing of which cannot be forecast with any certainty”. It continues to access the impact on the company and will make a further announcement when appropriate.

Hybridan Small Cap Feast 21/06/2022

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Visum Technologies seeking admission to The AQSE Growth Market. The Company's business is to own and operate an "on-ride" video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June. LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends

SysGroup (SYS LN) - Initiation of coverage

SysGroup is an award-winning provider of managed IT services, cyber security, cloud hosting and IT consultancy. The Group offers investors an attractive business model with high recurring revenue and a diversified customer base. SysGroup is competitively well positioned to benefit from sector trends and is investing in sales capacity to take advantage of cross-selling opportunities and a recovering market. In addition, the company has opportunities to make highly accretive acquisitions and its s

SHORE CAPITAL - OnTheMarket Plc (OTMP) - House Stock at 87p - Time to shine

Upgrading estimates following material contract win

Morning Note – 23 June 2022

Hybridan Small Cap Feast 27/06/22

Joiners: No Joiners Today. Leavers: No Leavers Today. What’s cooking in the IPO kitchen? Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or request an overdraft from their

Contract wins and trading update

Tribal has today announced multiple contract wins (both with new and existing customers) and as well, a positive interim update for FY22, highlighting that - driven by this sales momentum and stronger than expected implementations – revenue now expected to be “marginally ahead”. EBITDA meanwhile has been temporarily held back by a customer specific factor, though this is set to recover in H2 and hence management are guiding to unchanged EBITDA expectations for the full-year. We therefore upgrade