OTE (Hellenic Telecoms) | Back on growth trend, accelerating returns
In our new note on OTE we emphasize that the group has returned on growth trend despite the weak performance in Romania and argue that the solid trends in Greece, which accounts for c90% of group operating profits, are likely to continue by virtue of both structural and cyclical drivers and are likely to underpin 1.3-2.3% growth in group comparable adj. EBITDA (excl. IFRS 16) in 2019-20e. With profitability ticking higher, financing expenses edging lower and capex normalizing, we expect distributable FCF to increase markedly, with shareholder returns rising from c7% in 2019 to >9% post 2020e.Our note also presents a framework for the BB market through to 2021 arguing that high-speed BB take-up will increase to c37% by 2021 (from c17% currently), with OTE accounting for the bulk of the fibre market thanks to its infrastructure dominance, thereby being best-placed to take advantage of the retail upselling opportunity.
Hellenic Telecommunications Organization is a full-service telecommunications group. Co. provides local, long-distance and international fixed-line telecommunications services in Greece and Romania, and mobile telephony services through its Cosmote subsidiary in Greece, as well as in Albania, Bulgaria, the Former Yugoslav Republic of Macedonia and Romania. Co. also provides internet access services and Internet Protocol (IP) -based telecommunications applications, as well as information technology application development and hosting services using IP technologies. Also, Co. provides several other telecommunications services, including value-added services and public telephone services.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
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