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Research Tree provides access to ongoing research coverage, media content and regulatory news on TELECOM ITALIA SPA. We currently have 7 research reports from 1 professional analysts.
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TELECOM ITALIA SPA
TELECOM ITALIA SPA
Ready to dominate TV distribution and prepared for new competition from Iliad
20 Feb 17
TI has released a good set of Q4 results: Revenues were up organically by 0.8% yoy (vs -5.2% in Q1, -4.2% in Q2 and -1.2% in Q3) while the EBITDA (excluding the negative impact of non-recurring items) has increased sharply by 5.9% yoy as in Q3 but vs a decline of 1.7% in H1! EBITDA has clearly benefited from the actions implemented in the “cost recovery plan” that started in Q2 in the Domestic Business and in Q3 in the Brazil Business. In Italy, revenues were up by 2.7% yoy (vs +1% in Q3 and -1.7% in the H1). The solid, structural recovery of Mobile revenues was confirmed, thanks both to the maintenance of market share and the stabilisation of ARPU levels. But the key point is the EBITDA which has grown by 8.4% (vs 7.9% in Q3, +6.9% in Q2 and -5.2% in Q1). Excluding non-recurring restructuring charges, EBITDA would have grown by +4.5% in 2016, with an EBITDA margin of 45.9%, up 1.9ppts on 2015. In Brazil, Q4 revenues were down organically and at constant change by only 1.7% yoy (vs -5.2% in Q3 and -14% in H1)! The main issue is that the total number of subscribers (c.63m with a market share of 26%) was still down by 4.3% vs end 2015. Note, however, that like its competitors the group has seen its prepaid customer base contract sharply in 2016, due to the adoption of a restrictive policy for the disconnection of inactive customers according to Anatel’s new criteria (the Brazilian National Telecommunications Agency). Q4 EBITDA was up by 2.8% yoy (vs +0.5% in Q3 and -10.9% in H1) with the start in Q3 of cost-cutting operations.
A solid Q3 confirming a good trend
07 Nov 16
A good Q3 release for the Italian incumbent: revenues were down organically by only 1.2% yoy (vs -5.2% in Q1 and -4.2% in Q2) while the EBITDA (excluding the negative impact of non-recurring items) has increased sharply by 7% yoy (vs a decline of 1.7% in H1!), with an EBITDA margin of 44.4%, 3.3ppts higher than in Q3 15. The EBITDA has clearly benefited from the actions implementing the “cost recovery plan” that started in Q2 in the Domestic Business and in Q3 in the Brazil Business. In Italy, revenues were up by 1% yoy (vs -1.7% in the H1). The solid, structural recovery of Mobile revenues was confirmed, thanks both to the maintenance of market share and the stabilisation of ARPU levels. But the key point is the EBITDA which has grown by 7.9%. Excluding non-recurring restructuring charges (corresponding to 3% of EBITDA), EBITDA would have grown by +3.3% for the first 9m, with an EBITDA margin of 46.5%, up 1.8ppts on 2015, confirming the positive change in trend that started in Q2 (Q3: +7.8%, Q2: +6.9%, Q1: -5.2%). In Brazil, Q3 revenues were down organically and at constant change by 5.2% yoy (vs -14% in H1)! Service revenues were down by 2.4% yoy, while revenues from product sales dropped by c.40%, reflecting a sales policy less focused on the sale of handsets, as well as the impact of the Brazilian macro-economic crisis on family spending decisions. The main issue is that the total number of subscribers (c.63.2m) was still down by 4.5% vs end 2015 (with a market share of 25.2%, vs 25.7% at end 2015). Note, however, that like its competitors the group has seen its prepaid customer base contract sharply in 2016, due to the adoption of a restrictive policy for the disconnection of inactive customers according to Anatel’s new criteria (the Brazilian National Telecommunications Agency). The Q3 EBITDA margin was good at 32.6%, up 1.4ppt on Q3 15. Excluding non-recurring costs, EBITDA has indeed grown by 0.5% with the start of cost-cutting operations which offset the reduction in revenues.
An integrated European media powerhouse dies before being born
24 Oct 16
Once upon a time (say about 6 months ago), Mediaset and Vivendi concluded a splendid strategic alliance: the French group was to acquire 100% of Mediaset Premium, while each entity would be taking a 3.5% stake in the other on the occasion. The ambition was to build a pan-European OTT platform and to create a southern European content and VOD powerhouse… The announced wedding has since moved to the divorce legal battlefield, maybe paving the way for a ménage à trois.
Best quarter in Italy since 2009
27 Jul 16
Q2 revenues were down organically by 4.2% yoy (vs -5.2% in Q1) while the EBITDA (excluding the negative impact of non-recurring items) has decreased by only 1.7% yoy, with an EBITDA margin of 42.0%, 1.4ppts higher than in H1 15. But in Italy, revenues were down by only 1.1% yoy (vs -2.5% in the three previous quarters). The solid, structural recovery of Mobile revenues was confirmed, thanks both to the maintenance of market share and the stabilisation of ARPU levels. Note the revenues of the Consumer segment in H1 (55% of Domestic revenues) have increased by 1.5% yoy. But the key point is the EBITDA: excluding non-recurring restructuring charges (corresponding to 2% of EBITDA), EBITDA would have grown by +0.9%, with an EBITDA margin of 45.1%, up 1.2ppts on H1 15 and a positive inversion of trend compared to Q1 (+6.9% yoy in Q2 vs -5.2% yoy in Q1). In Brazil, Q2 revenues were down organically and at constant change by 13% yoy (vs -15% in Q1)! Service revenues were down by 5.7% yoy, while revenues from product sales dropped by c.60%, reflecting a sales policy less focused on the sale of handsets, as well as the impact of the Brazilian macro-economic crisis on family spending decisions. The main issue is that the total number of subscribers (c.64m) was still down by 3.4% vs end 2015 (with a market share of 25.6%, vs 25.7% at end 2015 and 26.7% a year ago). The H1 EBITDA margin was, however, at 29.9%, up 1.5ppt on H1 15. Another key point of the H1 release: TIM and Fastweb have entered into a strategic partnership aimed at speeding up the creation of the ultrabroadband infrastructure with FTTH technology in 29 Italian cities. The partnership envisages the establishment of a joint venture with 80% of the capital held by TIM and 20% by Fastweb. The new company’s business plan therefore envisages connecting around 3m homes with FTTH technology within 2020 which will allow connection speeds of 1Gps. Total investment is €1.2bn, which the joint venture will finance in part with equity and in part with debt. TIM’s share is already included in the capex of the 2016-18 Business Plan. Moreover, as part of the partnership, TIM will buy from Fastweb over the next 18 months the infrastructure with FTTH technology that will allow around 650 thousand homes in 6 cities to connect to TIM’s network a year earlier than envisaged in the Business Plan. The strategic partnership will allow the two companies to create the latest generation, extremely high speed, infrastructure more rapidly, at the same time permitting synergies in the investments.
The new CEO's aim to reach 2019 with €1.6bn of efficiencies
16 May 16
Q1 revenues were down organically by 5.6% yoy: In Italy, revenues were down by 2.3% yoy (as in the two previous quarters). This is a little bit disappointing: the recovery trend is slowing slightly compared to the previous quarters, after, in particular, a worsening of the performance in the Fixed segment, while the solid, structural recovery of Mobile revenues was confirmed, thanks both to maintenance of market share and stabilisation of ARPU levels. Note the revenues of the Consumer segment in the Q1 (55% of Domestic revenues) have increased by 2% yoy. In Brazil, Q1 revenues were down by 15% yoy! Service revenues were down by 8.3% yoy while revenues from product sales dropped by 61%, reflecting a sales policy less focused on the sale of handsets, as well as the impact of the Brazilian macro-economic crisis on family spending decisions. The main issue is that the total number of subscribers was 67.273m, a fall of 11.2% yoy, but this corresponds to a slight increase compared to end 2015 (with a market share of 26.1%, vs 25.7% at end 2015 and 26.7% a year ago). EBITDA was down by 7.5% yoy excluding non-recurring charges, with a quite correct margin of 43.34% in Italy while the Brazilian one was 28.7%, down 0.8 ppts on the previous year due to the contraction in revenues.
Don’t miss the opportunity to buy TI at a good price
17 Feb 16
The stock declined sharply by 4% yesterday following the release of mixed results in Q4. The stock has now declined just over 30% from its highs of last autumn (when Bolloré and Niel invited themselves to the capital of the Italian telco). 2015 revenues were down by 4.6% yoy, while the EBITDA declined by 17.9%, but this includes non-recurring charges of €1bn. Without these, the organic decline would have been of 4.5% with a margin of 41% (1.8ppt higher than in 2014!).
FY 2016 results confirm further strong delivery
21 Mar 17
Gamma’s FY 2016 revenues, Adjusted EBITDA and Adjusted EPS numbers were a touch ahead of our estimates. We make small upward adjustments to forecasts for all three years of our forecast horizon reflecting that performance. Gamma is capitalising on its position as a nimble player in an attractive marketplace. It made strong progress in 2016 as Voice over IP technology drove uptake of SIP Trunking and Hosted PBX services - both areas where Gamma has strong platforms. In addition, data services reflected Gamma’s investment in its network, channel partner numbers increased again and the indirect business accordingly showed strong revenue growth. The Direct Business also produced good growth and won some significant new contracts. The outlook statement is ’enthusiastic’ about the current year and comments that the Board ‘remains open to suitable M&A opportunities and areas for strategic capital investment’. Overall, an optimistic picture, in our view.
Making Mobiles Better
17 Jan 17
Mobile phones are increasingly the key connection for the modern world. This means that the performance of mobile phones, and their networks, is going to become more critical for all the apps and businesses that rely on them. New technologies such as VR, AR, and AV will need better, more reliable connections to really move into the mainstream. In this thematic piece we attempt to identify some of the most important issues facing mobile phone networks and their users, and start to identify solutions and enablers that will solve these problems and create value by doing so.
Panmure Morning Note 13-06-2016
13 Jun 16
More news on 5G means a favourable read-across for the key 5G ‘name’ – Spirent. Today the Dutch Ministry of Economic Affairs has gathered 10 partner organisations together to run a 5G test in North Groningen – tests to be carried out at the end of the year. This is favourable for Spirent as it illustrates that 5G is getting closer and with it raises the possibilities of earlier revenue opportunities for Spirent. Short term is good for share sentiment. We retain our Buy.
N+1 Singer - Morning Song 09-02-2017
09 Feb 17
Amino Technologies (AMO LN) Benefits of recent acquisitions shining through | Media Bad advertising…Big agencies and Google in the firing line? | Travel & Leisure Enterprise Inns (ETI LN) (Not Rated) - Solid AGM update | Northgate (NTG LN) Reiterating our Buy stance after a positive meeting | Small-cap quantitative research New quality style screen + 11 quality focus stocks | Speedy Hire (SDY LN) Forecast upgrades after a solid Q3 update
20 Mar 17
Despite the University of Michigan releasing its preliminary reading of March consumer sentiment on Friday, which suggested US personal finance confidence rising again, this time to a 17-year high as the Nation effectively achieves full employment, US equities remained narrowly rangebound. Industrial production data also released held steady in February which, although slightly below market consensus, still provided underlying confidence in continued growth amid a pickup in manufacturing and mining activity. But this was not enough given receipt of a slightly less hawkish tenor from the Fed. The problem appears to be that investors have heard Trump ‘talk-the-talk’ but, as was seen with the latest judges’ ruling against his travel ban, they are not yet convinced he can ‘walk-the-walk’. Thursday’s White House budget proposals, which focussed on cutting funding for projects deemed to have regional benefits, in order to increase funding to those with national scope, compounded this with some commentators suggesting the new programs will be less effective than existing ones. The President’s joint address to Congress, calling for legislation to procure US$1tr to rebuild the country’s tired infrastructure, for example, makes for great soundbites but Congressional scrutiny, particularly from fiscal conservatives who are reluctant to back massive federal spending, looks set be arduous to say the least. So while the wall of money being liberated globally from bond market rout provides plenty of back pressure, investors appear to be waiting for a new injection of confidence before being prepared to push already heady equity valuations one further step further. Traders also appeared unimpressed by U.S. Treasury Secretary Steven Mnuchin rebuffing a concerted push by world finance chiefs to disavow protectionism, fanning fears that the Trump administration's pursuit of an ‘America First’ policy could ignite global trade conflicts. With many officials suggesting they departed the G-20 meeting confused about where the new administration will ultimately land on trade policy, US equities ended mixed with only the NASDAQ able to put on a minute gain helped by Adobe, while the other two principal US indices were knocked by continued selling of health-care stocks, in particular Amgen which had released disappointing results from a cholesterol drug study. The cautionary mood spread to Asia, where only the Hang Seng put on a modest gain while the region’s other indices stayed in the red with the Nikkei being closed for a holiday. Important macro data from London today is limited to the Rightmove House Price Index for February which was released at midnight at +2.3% y-o-y, in line with expectations, while the EU produces Q4 Labour Costs; the US provides its Chicago Fed National Activity Index and later the Fed’s Charles Evans is due to make a speech. UK corporates due to report today include Volution Group (FAN.L), Satellite Solutions Worldwide (SAT.L), Frenkel Topping Group (FEN.L), Phoenix Group (PHNX.L) and Finsbury Food Group (FIF.L). Equities in London as seen similarly lacklustre this morning, with the FTSE-100 see moving 5 to 10 down in early trading.
Creation of a new mobile Indian leader
20 Mar 17
Vodafone will combine its subsidiary Vodafone India (excluding its 42% stake in Indus Towers) with Idea, which is listed on the Indian Stock Exchange. The implied EVs are $12.4bn for Vodafone India and $10.8bn for Idea. This is a merger of equals with joint control of the combined company between Vodafone and the Aditya Birla Group (which controls Idea), governed by a shareholders’ agreement. Vodafone will indeed own 45.1% of the combined company after transferring a stake of 4.9% to the Aditya Birla Group for $579m in cash concurrent with the completion of the merger. The Aditya Birla Group will then own 26% and has the right to acquire more shares from Vodafone under an agreed mechanism with a view to equalising the shareholdings over time. Until equalisation is achieved, the voting rights of the additional shares held by Vodafone will be restricted and votes will be exercised jointly under the terms of the shareholders’ agreement. Vodafone India will be deconsolidated by Vodafone, reducing Vodafone’s net debt by c.$8.2bn and lowering Vodafone Group’s leverage by around 0.3x the EBITDA. The transaction is expected to close during 2018, subject to the customary approvals.