reports
- Russell Waller
Elisa (Neutral, TP: €53, +9%) Q3 24: Stable MSR growth, but much wea...
Elisa has reported a slightly mixed set of results; reported service revenue growth is much slower and has missed expectations badly(-0.2% y/y from +3.9% y/y), but MSR growth is unchanged at +4.8% y/y with fixed -5.8% y/y from +2.9% y/y. EBITDA though is in-line with expectations, and reported EBITDA growth is +3.7% y/y from +3.9% y/y, suggesting that [the lack of] operational leverage is now working in reverse.
- Ben Rickett
- James Ratzer
- Russell Waller
EU TELECOMS REFRESH: Can the outperformance continue?
When was the last time we could write that the EU Telecoms sector has been the second best performing sector in the market YTD? As a result, this raises the question of whether the outperformance can continue. We believe regulation will ultimately determine the answer to this question.
- Russell Waller
Elisa (Neutral, TP: €53, +26%) Q2 24: Better SR trends, but MSR grow...
Elisa has reported a slightly mixed set of results; service revenue growth is better (+3.9% y/y from +1.0% y/y), but MSR growth is slightly slower, as is EBITDA growth. The better SR growth is thanks to fixed, which is thanks to Digital Services (DS) – but as per previous quarters, DS revenue is not really filtering through to EBITDA (which was only in-line vs consensus despite a SR beat), albeit B2B EBITDA growth was positive y/y.
- Russell Waller
Elisa (Neutral, TP: €54, +27%) Q1 24: EBITDA growth better than SR gr...
Elisa reported good results, with stable service revenue growth (+3% YoY) but importantly an acceleration in clean EBITDA (to +6% y/y from +4% y/y in Q4). EBITDA growth was better than SR growth for the first time since Q3 2021. This is what the market wanted to see, as concerns have been around operational leverage;
- Russell Waller
Elisa (Neutral, TP: €54, +26%) Q4 23: B2B performance remains a conce...
Elisa results continue to be characterised by a good B2C performance but a poor B2B performance (Revenue -1.4% y/y, EBITDA -3.4% y/y) . The bull case for the B2B division is that is that there are upfront losses and investments that will reverse, and when that happens, EBITDA growth will become positive.
- Russell Waller
Elisa (Neutral, TP: €53, +24%) Q3 23: Miss vs consensus, B2B EBITDA ...
Growth has slowed slightly, and numbers have missed slightly. For a stock that trades at a 32% premium to the sector on EV/FCF that is not a good look. The miss and slowdown is small, but that is not the point, especially when there are also concerns around B2B EBITDA and International Digital Service growth outlook (growth outlook downgraded this quarter).
- Russell Waller
Elisa (Neutral, TP: €56, +17%) Q2 23: In-line vs consensus, but B2B E...
MSR growth remains good at Elisa, but this quarter, fixed revenue has slowed materially, and Digital Services has actually reported negative revenue y/y. B2B EBITDA is also negative y/y. Group EBITDA is in-line (-0.3% light), but within that, B2C is +2.4% ahead and B2B is -7.5% light.
- Russell Waller
- Russell Waller
Elisa (Neutral, TP: €57, +10%) Q4 22: Lower growth, but in-line resul...
The concern at Elisa for the past year or so has been operational leverage (the lag between revenue growth and EBITDA growth). This quarter, the operational leverage is better, but growth is much slower in both revenue and EBITDA, which does slightly beg the question: does Elisa have to spend on OpEx to generate revenue growth?
- James Ratzer
New Street: Most definitive evidence of price increases
One of our big themes for 2023 is that better pricing in European telcos can drive upside to consensus numbers. Our 2023 look-ahead note from last month looked at this in more detail but just this past week we then published our latest Tariff Tracker and we see the strongest evidence yet pricing really is going up – with up to a 5pp growth improvement over the past year and record high pricing growth.
- Russell Waller
- Russell Waller
New Street: Elisa (Neutral, TP: €55, +19%) Q3 22: Better operational ...
The concern at Elisa for the past year or so has been operational leverage (the lag between revenue growth and EBITDA growth). This quarter, the operational leverage is better, thanks to unchanged EBITDA growth, and slightly slower revenue growth (revenue and OpEx have come in ahead of expectations again, with EBITDA in-line).
- Ben Rickett
- James Ratzer
- Russell Waller
New Street: EU Telecoms Inflationary cost update: electricity costs a...
We recently published a deep dive into inflationary cost pressures, focusing specifically on energy and wages, looking at how the sector might mitigate some of the risk – read that report HERE. In this piece, we update our thoughts given the fall in electricity wholesale prices, and the announcement of several Governmental support packages.
- James Ratzer
New Street: Could we see a sector revenue beat in 2023? Evidence of i...
In June, we showed a new methodology for estimating average consumer pricing in EU Telecoms (LINK), our most definitive approach to date to try to understand front-book pricing dynamics, and suggested more needed to be done to counter rising inflationary pressures. Updating this approach three months on, we now see evidence that pricing could be marginally improving, albeit still well below headline inflation. So, despite obvious macro concerns, there is an outside chance of a sector revenue be...
- Ben Rickett
- James Ratzer
- Russell Waller
New Street: European Telecoms Deep-Dive How to meet the challenge of ...
One of the most common questions we have received over the past few months is how the European telcos will be able to cope with rising energy prices. This deep-dive note sets out our answer to this; the broader impact of inflation on their businesses and which companies are best & worst positioned.
- James Ratzer
- Russell Waller
New Street: Europe inflation price update Summer promotions modestly ...
At the end of May, we published a definitive report looking at inflationary trends in Europe, concluding that the industry needed to do a better job lifting front book prices to show real growth. In case you missed it over the weekend, we updated this analysis now with more in-depth work over a longer time series, and conclude that at least summer promotions across Europe this year seem less aggressive than last year, but the industry still needs to do more if it is going to deliver "real" EBITD...
- Russell Waller
New Street: Elisa (Neutral, TP: €55.0, +2%) Q2 22: Excellent service...
The concern at Elisa for the last year or so has been operational leverage (the lag between revenue growth and EBITDA growth). This quarter is the same again: EBITDA growth continues to lag revenue growth, and OpEx has come in ahead of expectations.
- Ben Rickett
- James Ratzer
- Russell Waller
LBTYA LIBERTY GLOBAL PLC CLASS A
SCMN SWISSCOM AG
ATC ALTICE EUROPE NV CLASS A
TNET TELENET GROUP HOLDING NV
DTE DEUTSCHE TELEKOM AG
TIT TELECOM ITALIA S.P.A.
CLNX CELLNEX TELECOM S.A.
OBEL ORANGE BELGIUM SA
TEF TELEFONICA SA
ELISA ELISA
ORA ORANGE
TELIA TELIA COMPANY
VOD LN VODAFONE GROUP
BT BRITISH TELECOM
ILD EU ILIAD SA
- Russell Waller
New Street: European Telecoms High Yield Good start to the equity ear...
The Equity earnings season is in full swing, and so far, there have been some encouraging prints, with Elisa (HERE), Telia (HERE), Orange (HERE), Tele2 (HERE), Swisscom (HERE), KPN (HERE) and Proximus (HERE) all posting good numbers.
- Russell Waller
New Street: Elisa (Neutral, TP: €55, +1%) Q1 22: Good LFL SR trends, ...
The concern at Elisa for the last three quarters has been operational leverage (the lag between revenue growth and EBITDA growth). This quarter, EBITDA growth continues to lag revenue growth, and OpEx has come in ahead of expectations again.
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