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Research Tree provides access to ongoing research coverage, media content and regulatory news on TELECOM ITALIA SPA. We currently have 6 research reports from 1 professional analysts.
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TELECOM ITALIA SPA
TELECOM ITALIA SPA
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!).
A good recovery trend in Italy but tough market conditions in Brazil
06 Nov 15
Q3 revenues were down by 4.6% yoy at constant currency. While the domestic decline of 1.4% yoy was slightly better than expected we note, however, that market conditions were once again tougher than expected in Brazil which recorded a sharp drop of 15% in its revenues (at constant currency) due largely to a 58% reduction in handset sales (sold with no margin a year ago). Q3 EBITDA was down by only 3.7% yoy organically and at constant change. Note in particular the Brazilian margin was up by 3.8ppt from 27.4% to 31.2%, while the domestic margin was back to a more reasonable number (44.7%) after an exceptional Q3 14 (at 47.2%!). Note in parallel to this release that the board proposed to convert TI’s saving shares (representing 30% of the capital but carrying no voting rights) into ordinary shares. This will have a dilutive effect on Vivendi’s stake in TI which could be only 13% given the 20% currently held by the French group.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
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.
N+1 Singer - Morning Song 16-01-2017
16 Jan 17
As the birthplace of Stephenson, Armstrong and Swan, the North East of England has a proud history of industrial and technological innovation. Despite local economic challenges, the region’s industrial heritage lives on through continuing success in high end engineering and technology. The recent takeovers of private equity backed SMD (subsea robotics) and Nomad Digital (wi-fi on the railways) are testament to this. The North East has also emerged as a leader in genetics and genomics with an enviable life sciences and healthcare infrastructure. Against this backdrop, we expect the region to continue to throw up attractive IPO candidates to build on the six new listings in the past three years. We expect 2017 to be far kinder to the existing portfolio of North East plcs than 2016 (a year to forget) with recent management changes one important theme for the new year. Our top picks are Hargreaves Services, Quantum Pharma and Zytronic (all N+1 Singer Corporate clients) and we are Buyers of Northgate and Grainger.
Small Cap Breakfast
19 Jan 17
SuperAwesome — The London based specialist in e-compliance is considering an IPO in its home town according to City A.M. Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise. Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January
The Cybersecurity Rebellion: “No, I’m Spartacus!”
07 Jun 16
Steve “Woz” Wozniak, infamous co-founder of Apple, was the latest culprit to send shivers across the tech world by claiming Cybersecurity is the greatest threat the world has faced since the atom bomb. Mr Wozniak was alluding to the heightened sense of fear that recent high profile breaches have caused Cybersecurity to be put at the forefront of political, corporate and now it would appear, investor agendas. As the topic gains increasing awareness, it gives rise to a number of companies claiming to be a “thought leader” in the Cybersecurity space, holding the best IP and the best routes to market. With many companies singing from the same loss making hymn sheet it is making it ever difficult to spot the true “Spartacus” from the crowd.
Shareholder approval sought for revised terms
19 Jan 17
Vislink has modified the terms of the agreement to sell the assets of Vislink Communication Systems (VCS). The total consideration payable remains $16m. This will now be split into an initial cash consideration of $6.5m and $9.5m deferred consideration payable in secured loan notes, which must be redeemed within 45 days of the disposal completing. Shareholder approval of the modified terms is required before the disposal can complete. We leave our estimates, which assume that VCS remains within the group, unchanged and will review them on completion.