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Organic Q1 revenue growth was in line with expectations at 3.2% yoy, while EBITDA was up by only 2.1% yoy and lfl due to a significant increase in the cost of energy and the higher growth in lower margin revenue in Spain. EBITDA less capex was however good, up by 6.4% yoy due to a 4.9% decline in capex. The dividend yield is 6.45%, above the 4% for the sector best in class: we maintain our Buy.
Companies: Telefonica SA
AlphaValue
Q3 was globally in line with expectations. Things are still tough in Spain but Germany is a very strong asset while Brazil and the UK are deploying fibre networks which should bear juicy fruits in the future. Hispam operates as an autonomous company which could soon be sold as a whole or piecemeal. Our significant upside is commensurate with the incredibly low levels reached one year ago. The stock has partly recovered but is still 35% under its pre-COVID-19 levels.
The Q2 numbers are slightly better than expected. Telefonica has also upgraded its outlook for 2021. The dividend cut of last year, the recent sale of its telecommunications towers division in Europe and in Latin America for €7.7bn to American Tower, the merger with Virgin in the UK, the reduction in net debt and a quite correct H1 performance should indeed help restore market confidence. We maintain our opinion at Buy on the stock.
Q4 numbers were in line with expectations and quite reassuring. Telefonica has, however, preferred to cut its dividend by 25% (at €0.3 vs €0.4 previously) to preserve its cash flow while its investments will remain substantial in the coming years. So after the recent sale of its telecommunications towers division in Europe and in Latin America for €7.7bn to American Tower, this cautious cut could indeed help restore market confidence. We maintain our opinion at Buy on the stock.
Telefonica announced this morning that its subsidiary Telxius has signed an agreement with American Tower for the sale of its towers division in Europe for €7.7bn. It’s indeed an impressive price and TEF succumbed logically to the sirens of American Tower to reduce its debt a little more. We maintain our opinion at Buy on the stock.
Telefónica remains on track to deliver its 2020 outlook of flat EBITDA-capex yoy in organic terms but… at constant currency. The Forex headwind is however a storm in Brazil (-30% yoy). The stock is trading at a 55% discount to its February level. The dividend yield is nearly 15% reflecting the market’s major concern about its sustainability. Even if the group ends up lowering its dividend due to this Forex storm… we maintain our Buy opinion.
A poor Q2 performance for Telefonica although this had been expected given, in particular, the double penalty linked to the South American currency weakness vs the Euro (in particular the Brazilain Real) during the pandemic. For 2020 Telefónica nonetheless remains on track to deliver a slightly negative to flat EBITDA-capex yoy in organic terms but… at constant currency. The key point thus remains that the 2020 dividend is confirmed at €0.40.
The Q1 is in line with our expectations. Telefonica’s revenues could decrease by 5% in 2020, exceeding the top range of our own estimates of the COVID-19 impact on a telco’s account but this is due to the recent steep decline of South American currencies. As capex should decline like EBITDA, cash flows are not in danger and the group confirmed its dividends. The creation of a JV bringing together Virgin and O2 is strategically and fundamentally a good deal.
Telefonica has approved a 5-point plan which is supposed to mark a new era for the company. The key point seems the focus on the four markets which represent today 80% of Telefonica’s business and where the group is a solid leader. In parallel, the operational spin-off of Hispanoamerica seems to show the group’s willingness to disengage at term from these activities. It’s a very interesting perspective on the long term. We maintain our Strong Buy on the stock.
Nothing extraordinary about the Q2 release. Q2 revenues were up by 3.7% yoy and lfl, exactly like in Q1, while the adjusted EBITDA has increased in parallel by 1.6%, a number still a little bit weak compared to the revenue growth. It seems that management was indeed quite right to give a cautious guidance for 2019 with both revenue and EBITDA growth of around 2% (and a dividend unchanged).
Q1 globally in line with expectations (with good organic revenue growth of 3.8% but an adjusted EBITDA up by only 1%). At less than 6x its EBITDA and with a current dividend yield of 5.6%, the stock offers some potential but there is no catalyst in the short term.
The group released its Q4 results yesterday which once again were quite good if we leave out of the equation…the negative FX impact. Revenues were up organically by 3% yoy, a quite good number reflecting a slight acceleration compared to the +2.7% and +2% recorded during Q3 and H1. And if, as usual, the reported revenues declined due to the South American FX, it was however less than in the previous quarters as they were eventually down by only 1.9% (vs. -8.3% in Q3 and -6.75 in H1). Q4 EBITDA
A quite correct set of results for Q3 in organic terms but the continued deterioration in the Brazilian real and the collapse of the Argentine peso have severely impacted the reported accounts. This is still limiting any real recovery of the stock. Note, however, that the Argentine business which represented 6.5% of Telefonica’s business a year ago now represents only 2%. NB The Brazilian real is currently up by 15% from its lows of September. We maintain our Add recommendation.
A quite correct set of results for Q2 but the continued deterioration in South American currencies against the euro is still limiting any real recovery of the stock. We maintain our Add recommendation on the stock with an 11.5% upside.
Once again an as expected set of results for Q1 if we leave out of the equation…the negative forex impact. Revenues were up organically by 2% yoy, a number which is in line with the growth recorded during the first 9 months of 2017 but slightly below the good 4.8% recorded in the previous Q4. Note also that, excluding the impact of regulation, revenues would have risen by 3.1% yoy. But the reported revenues were eventually down by 7.2% due to the strong depreciation of South American currencies
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Finals from Trakm8 Holdings plc (TRAK.L), the global telematic and data insight provider, were in line with previous guidance with revenue increasing 13% to £18.1m and a £0.3m positive swing in adj. PBT to breakeven. Momentum built during FY22 with a number of contract awards and extensions secured in H2 and the outlook is positive although the company must navigate the challenges around component supply and inflationary pressures. Trakm8’s integrated model (software and hardware, design, manufa
Companies: Trakm8 Holdings PLC
Allenby Capital
tinyBuild— a leading video games publisher and developer with global operations. tinyBuild's strategic focus is in creating longlasting IP by partnering with video games developers, establishing a stable platform on which to build multi-game and multimedia franchises is to join AIM. Offer details TBC. Due mid-March. AMTE Power, a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to ta
Companies: IKA UPR WYN ENW BWNG TRAK DBOX HZM G4M
Hybridan
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
Companies: ARS CCS D4T4 OHG ORR SYM XPF MWE
Stock up by 5% following the Q2 release. The market welcomes indeed the return of dividends and the effective deployment of BT’s ultrafast fibre network. Moreover, the group has hit its £1bn cost savings target 18 months early and now brings forward its 2024/25 target for £2bn of savings to 2023/24 with further savings in 2024/25. Here is the rub: the sales recovery is still not there. We maintain therefore our opinion at Add on the stock.
Companies: BT Group plc
A correct release globally in line with expectations (slight slowdown in revenue growth in Q4 but a slightly better than expected FCF for the full year) but the outlook given by management for 2022/23 is quite cautious (this is the upper range of the guidance which corresponds to our estimates). We maintain our opinion at Buy. Note, however, the CEO Nick Read is rather under fire after missing opportunities in Italy (Iliad), Spain (Orange-Masmovil merger) and with Vantage.
Companies: Vodafone Group Plc
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