Hrvatski Telekom

Hrvatski Telekom
Hrvatski Telekom
Regulatory environment remains uncertain
Hold
Price 27.01.12*
241
Price target
253
Volatility risk
medium
Year high/low
313/229
Currency
HRK
HRK/EUR
7.57
GDR rate
n.a.
Shares outstanding eoy in mn
81.89
Market capitalisation
(total shares) in EUR mn
2,605.5
Free float
38.4%
Free float in EUR mn
1,000.5
Avg. daily turnover
(12 m) in EUR mn
0.59
Index
CROBEX
ISIN code
HRHT00RA0005
Bloomberg
HTRA CZ
Reuters
HT.ZA
www.t.ht.hr
320
310
300
290
280
270
260
250
240
230
220
F
M
A
M
J
J
A
S
O
N
D
J
HRVATSKI TELEKOM
CROATIA CROBEX
Source: Thomson Financial Datastream
We maintain our “hold” recommendation on the T-HT stock unchanged. On the other hand, we
reduced our 12-month cum dividend TP from HRK 255 per share to HRK 253 per share because
the Croatian parliament reinstated the 6% tax on mobile service revenues until June 2013.
Outlook: Our team of economists expects the Croatian economy to slip by -1.0% in FY 12.
Moreover in our view the regulatory environment is getting harder in Croatia. The company
is still in discussion with the regulator on wholesale tariffs for FTTH. Moreover WLR (wholesale
line service) and naked BSA (bit-stream access) based on discount formulas were introduced
in summer last year. The negative impact on T-HT’s KPI was already visible in higher wire-line
churn and lower broadband net additions in 3Q11. The alternative operators Optima and H1
have started to more aggressively encourage customers to switch to a wholesale line rental
service from the carrier pre-selection. On the mobile side, the revenues were negatively
influenced by a price war in the prepaid segment. In addition MTR at EURc 5.3 per minute
in Croatia are relatively high and are expected to decline to at least EURc 3.0 or rather
lower by the middle of FY 2013, when Croatia is expected to accede to the EU. Therefore
mobile roaming tariffs are expected to decline as well. Moreover the Croatian parliament has
approved the government proposal to reinstate the 6% tax on most of the mobile revenues from
the beginning of February this year. The management plans keep capex at low levels due a
postponement of the FTTH rollout. Moreover we expect that the planned rollout of the 4G mobile
network will also be postponed. The company had about HRK 3.2 bn of current financial assets
or about HRK 38 per share on its balance sheet in 3Q11, which indicates that the company
would be able to pay a special dividend above our estimates. The management has confirmed
the guidance for moderately lower revenues and almost flat EBITDA for FY 2011 in comparison
to last year. The dividend policy guidance is a historical dividend payout ratio, which was at
least 100% in the past three years.
4Q 11 preview: T-HT is expected to announce its 4Q11 results on February 14 at 8:00 CET.
We expect a 6% decline in the top line to be mainly driven by an expected fall in mobile
revenues due to intense competition. Mobile revenues were negatively impacted by almost a
30% cut in MTR from January FY 2011. We expect EBITDA adjusted for one-off items to decline
by 4.1% yoy in 4Q11. EBITDA might be impacted by a provision of HRK 162 mn due to
planned headcount reduction in 1Q 2012. We expect T-HT's management to propose a dividend
of HRK 22.50 per share even though the company has the ability to pay a higher dividend.
Valuation: We have reduced our 12-month cum dividend price target from HRK 255 per share
to HRK 253 per share based on a DCF model mainly due to the reinstated 6% tax on mobile
revenues until June 2013.
Key figures and ratios
HRK
Analyst:
Jindrich Svatek
Tel.: +420-221-141-841
e-mail: jindrich.svatek@rb.cz
Supervisory authority: Financial Market Authority
* The indicated price is the last price as available
at 6.30 AM on 30.01.12
Sales (mn)
EBITDA (mn)
EBIT (mn)
Net profit a.m. (mn)
Earnings per share (adj.)
EPS adjusted growth
Adjusted PE ratio
DPS
Dividend yield
EV/EBITDA
Price book value
12/2009
12/2010
12/2011e
12/2012e
12/2013e
8,517
3,695
2,293
2,023
26.3
-6.8%
10.4
34.05
12.4%
4.8
1.9
8,375
3,662
2,247
1,831
22.4
-15.0%
12.9
22.76
7.9%
5.3
2.1
8,019
3,408
2,057
1,715
22.5
0.8%
10.7
22.50
9.3%
4.5
1.8
7,563
3,301
2,021
1,689
20.6
-8.4%
11.7
22.00
9.1%
4.6
1.8
7,622
3,317
2,089
1,748
21.3
3.5%
11.3
21.50
8.9%
4.6
1.8
Source: Hrvatski Telekom, Raiffeisen Centrobank estimates
46
Hrvatski Telekom
Trigger
Momentum
Explanation
Macroeconomic situation
negative
• Our research team expects GDP to drop by -1% yoy in FY 12 and grow by 1.5% yoy in FY 2013
• MTR at EURc 5.3 per minute are still high
Competition & regulation
negative
• The regulatory environment is getting stricter. The regulator now insists on a “retail minus” formula for
FTTH/B for network unbundling. The amount of the discount is uncertain
• Vipnet (TA) has acquired B.net in order to provide triple play services
• Fixed line churn increased in 3Q11(negative)
KPI
negative
6% fee (taxes) on mobile revenues
negative
Balance sheet
positive
Dividend payment
positive
• Mobile ARPU declined by almost 12% yoy in 3Q 11 (negative)
• ADSL main lines remained practically flat at 648k in 3Q 11 vs 2Q11 (neutral)
• The fee of 6% on mobile service revenues was reinstated until June FY 2013
• The company is net cash positive (HRK 38 per share in 3Q11), which we see as a current short-term
advantage.
• We expect T-HT to pay a dividend of HRK 22.50 per share for FY 11 - high dividend yield above 9%
Source: Raiffeisen Centrobank
Outlook
We maintain our “hold”
recommendation
Our team of economists expects the Croatian economy to slip by -1.0% in FY12. Moreover
in our view the regulatory environment is getting harder in Croatia. The company is still in
discussion with the regulator on the wholesale tariffs for FTTH. In addition, WLR and BSA
based on discount formulas were introduced in summer last year. The negative impact was
already visible in higher wire-line churn and lower broadband net additions in 3Q11. The
alternative operators Optima and H1 have started to more aggressively encourage customers
to switch a wholesale line rental service from the carrier pre-selection. In addition, Vipnet has
acquired the cable operator B.net and therefore will be able to offer triple play packages.
On the mobile side, revenues were negatively influenced by a cut of almost 30% in MTR in
January 2011 and a price war in the prepaid segment (Tele2 and Tomato-Vipnet’s brand
name). In addition MTR at EURc 5.3 per minute in Croatia are still relatively high and are
expected to decline to at least EURc 3.0 or even lower by the middle of FY 2013, when
Croatia is expected to accede to the EU. Therefore mobile roaming tariffs are expected to
decline further. On the other hand, T-HT’s management indicated that the competitors have
been expected to be less aggressive with their pricing policy in future. Tele2's customer base
has reached a critical mass (more than 14% market share based on SIM cards). Tele2 was
already profitable on EBITDA level and reached positive free cash flow in 3Q11.
Special 6% tax on mobile service
revenues was reinstated by the
parliament until June FY 2013
Surprisingly the Croatian parliament has approved the government proposal to reinstate the
6% tax on mobile service revenues from the beginning of February until June FY 2013. We
expect the reinstatement of the tax to reduce group revenues by about HRK 140 mn. The
management plans to keep capex at low levels due a postponement of the FTTH rollout. We
also expect that the planned mobile network upgrade to LTE technology at the current block
of 1,800 MHz will be postponed. Currently there is no deadline or any indication when
the spectrum at 800 Mhz will be auctioned. We also remind that the management and the
regulator have different views on FTTH regulations. We expect fixed voice revenues to be still
influenced by fixed-to-mobile substitution and higher churn due to more intense competition
from the alternative operators Optima and H1.
On the positive side, the company had about HRK 3.2 bn of current financial assets or about
HRK 38 per share on its balance sheet in 3Q11, which indicates that the company would be
able to pay a special dividend above our estimates. On the other hand, it seems to us that the
management prefers to save its funds for M&A activity. There is a possibility that the tender
for PTK Kosovo will be reopened.
47
Hrvatski Telekom
All in all, the Croatian economy is expected to be weak this year while the regulatory
environment is getting stricter. Moreover due to unfavourable regulation on FTTH the company
cannot continue its long-term investment strategy in FTTH network rollout. In addition, special
taxes on mobile service revenues reduce incentives for investments in the mobile network. On
the other hand, in our view the expected attractive dividend yield above 9% and the strong
balance sheet limit the stock’s downside potential.
We have made two main changes in
our model
At the beginning of January T-HT announced that its headcount would be reduced by 450
employees in 1Q 2012. We have estimated that T-HT will have to create a provision of
HRK 162 mn due to this headcount reduction. We assumed the provision to fully impact
EBITDA, which need not be the case if T-HT uses a part of its previous reserves on the balance
sheet for the severance payments. In any case we estimate the cash outflow at HRK 162 mn in
1Q 2012. In addition, the Croatian parliament adopted the reinstatement of the special 6%
tax on mobile service revenues until June 2013. Therefore we have reduced our top line and
consequently EBITDA due to the tax. On the other hand, we have moderately reduced staff
costs because the headcount reduction is higher than we expected. Due to these changes we
have reduced our price target by HRK 2 per share.
Earnings preview 4Q 11 (February 14)
Hrvatski Telekom
in HRK mn
Sales
EBITDA
EBIT
Net profit
EPS
EBITDA margin
FY 2011
4Q11e
8,019
3,408
2,057
1,715
20.9
42.5%
1,927
609
263
232
2.8
31.6%
4Q10
yoy
3Q11
2,055
-6.2%
804
-24.3%
377
-30.2%
346
-32.9%
4.2
-32.9%
39.1%
2,209
1,131
791
655
8.0
51.2%
Source: T-HT, Raiffeisen Centrobank estimates
n
We expect the decline in the top line to be mainly driven by an expected fall in mobile
revenues. Mobile revenues were negatively impacted by almost a 30% cut in MTR from
January FY 2011 and an intense competition.
n
We assumed EBITDA to be impacted by a HRK 162 mn provision for severance payments.
However, the impact of the provision on EBITDA might be lower if T-HT uses some of the
reserves which are on the balance sheet. Excluding the one-off we would expect clean
EBITDA to decline by 4.1% yoy and the EBITDA margin to reach 40% in 4Q 2011. In other
words, due to accounting uncertainty it is better to watch clean EBITDA than the reported
figure.
n
We expect the company to pay a dividend of HRK 22.50 per share. In our view, the
dividend proposal will be the most interesting item to watch.
48
Hrvatski Telekom
Key assumptions and estimates
Revenues
in HRK mn
2010
2011e
2012e
2013e
Fixed line revenues (net)
Mobile revenues (net)
Consolidated revenues
4,684
3,691
8,375
4,705
3,314
8,019
4,399
3,163
7,563
4,319
3,303
7,622
2010
2011e
2012e
2013e
Fixed line revenues (net)
Mobile revenues (net)
Consolidated revenues
3.0%
-7.0%
-1.7%
0.5%
-10.2%
-4.3%
-6.5%
-4.5%
-5.7%
-1.8%
4.4%
0.8%
2010
2011e
2012e
2013e
1431
-3.6%
1457.5
131
629
592
127
32.4%
-18.0%
-8.2%
1147.4%
1250
-12.6%
1340.5
128
650
639.5
121
30.0%
-17.0%
-10.0%
85.7%
1120
-10.4%
1185
120
665
657.5
120
5.0%
0.0%
-2.0%
2.0%
1070
-4.5%
1095
120
680
672.5
120
3.0%
0.0%
0.0%
2.0%
2010
2011e
2012e
2013e
T-Mobile market share
45.5%
No of SIM cards eop (000')
2,901
Av no of SIM cards (000')
2,880
ARPU (HRK) (including visitors roaming and other revenues) 106.8
45.0%
2,913
2,907
95.0
45.0%
2,913
2,913
90.5
45.0%
2,913
2,913
94.5
Source: HT, Raiffeisen Centrobank estimates
Revenues growth rates
Source: HT, Raiffeisen Centrobank estimates
KPIs and assumptions
Total fixed lines ('000)
Decline Av fixed lines (´000)
Fixed line ARPU (HRK)
ADSL customers (´000)
Av ADSL customers (´000)
ADSL's ARPU (HKR)
Other internet revenue growth rate
Data revenue growth rate Wholesale revenues growth rate
Other revenue growth rate
Source: HT, Raiffeisen Centrobank estimates
Mobile selected key figures
Source: HT, Raiffeisen Centrobank estimates
Operating costs
in HRK mn
Material expenses
Other expenses
Staff costs
Bad debts Total opex
2010
2011e
2012e
2013e
-2,327
-1,415
-1,198
-114
-5,054
-2,309
-1,283
-1,313
-56
-4,961
-2,193
-1,240
-1,102
-76
-4,612
-2,241
-1,235
-1,103
-76
-4,655
2010
2011e
2012e
2013e
-27.8%
-16.9%
-14.3%
-1.4%
-60.3%
-28.8%
-16.0%
-16.4%
-0.7%
-61.9%
-29.0%
-16.4%
-14.6%
-1.0%
-61.0%
-29.4%
-16.2%
-14.5%
-1.0%
-61.1%
Source: HT, Raiffeisen Centrobank estimates
Group opex as % of sales
Material expenses Other expenses
Staff costs
Bad debts Total opex
Source: HT, Raiffeisen Centrobank estimates
49
Hrvatski Telekom
Risks to our planning model nWe see a business risk if the regulatory environment becomes even harder and the
competition more intense (e.g. Vipnet acquisition of B.Net) which would mean higher than
expected pressure on revenues and profitability.
nT-HT does not have all necessary building and use permits for ducts infrastructure (DTI) and
is not registered as the owner of the majority rights to ducts in the Croatian land registers.
For example, the City of Zagreb has been claiming ownership of the telecommunication
distribution infrastructure and seeking compensation of HRK 120 mn plus statutory interest.
However, the management of T-HT believes that the claim is without merit.
nOverpayments on acquisitions represent a downside risk and vice versa.
nHigher than expected dividend payments (a net cash position of about HRK 38 per share
in 3Q11) or a share buyback would be positive for the stock’s performance.
nAn improved capital structure or lower market risk premium or lower interest rates would
be positive due to lower WACC
Valuation
Remain on “hold”
TP cut to HRK 253 from HRK 255
We have valued the T-HT stock based on a discounted cash flow model and for cross-checking
purposes we used a relative valuation. We have reduced our 12-month cum dividend price
target from HRK 255 to HRK 253 because we have lowered our top line and earnings
estimates due to the reinstated 6% tax on mobile revenues until June 2013.
At our 12-month cum-dividend price target of HRK 253 per share, the stock would be traded
with expected EV/EBITDA ratios of 4.9 for FY 2012 and FY 2013. T-HT is a net debt positive
company, which we see rather positively at the moment taking into account the uncertain
global environment (e.g. sovereign debt problems of some European countries). In addition
the expected dividend yield of about 9.3% for FY 2011 looks attractive. Therefore in our
opinion, the downside potential is limited while for a significant upside potential we do not
currently foresee a positive catalyst.
50
Hrvatski Telekom
DCF valuation
FCF projection
in HRK mn
Consolidatedsales
EBITDA
EBITA
Taxes paid on EBITDA
NOPLAT
Adj. NOPLAT
Depreciation of PPE & intangibles
Gross investment in PPE & intangibles
Change in working capital
NWC/Sales
Change in LT provisions other than tax
Net acquisitions & disposals
Free cash flow to firm
Adj.freecashflowtofirm
EVDCF,mid-yearassumption
+ MV of non-operating assets eop
- MV of net debt eop
- MV of minorities eop
Adjustments to EV eop
Fairvalueofequity
Shares outstanding (mn)
Fairvaluepershare(inHRK)
2011e
2012e
2013e
2014e
2015e
8,019.0
3,407.6
2,057.1
-428.8
1,645.7
1,645.7
1,350.5
-1,002.4
69.1
-4.3%
33.0
0.0
2,095.9
2,095.9
14,586.3
380.0
-4,034.7
0.0
0.0
19,001.0
81.9
232
7,562.6
3,301.1
2,020.7
-422.3
1,616.5
1,616.5
1,280.4
-983.1
-148.7
-2.6%
-14.0
0.0
1,751.1
1,751.1
14,476.6
380.0
-4,016.0
0.0
0.0
18,872.6
81.9
230
7,621.7
3,316.7
2,088.7
-417.7
1,671.0
1,671.0
1,227.9
-1,028.9
-1.7
-2.6%
-19.0
0.0
1,849.3
1,849.3
7,720.7
3,281.3
2,079.3
-415.9
1,663.5
1,663.5
1,202.0
-1,150.0
-34.6
-2.1%
n.a.
0.0
1,680.9
1,680.9
7,759.4
3,258.9
2,066.9
-413.4
1,653.5
1,653.5
1,192.0
-1,155.0
0.8
-2.1%
n.a.
0.0
1,691.4
1,691.4
2016e
TV CF
2011e
2012e
2013e
2014e
2015e
2016e
TV CF
-4.3%
42.5%
-20.0%
-4.3%
74.2%
26.1%
-5.7%
43.7%
-20.0%
-2.6%
76.8%
23.2%
0.8%
43.5%
-20.0%
-2.6%
83.8%
24.3%
1.3%
42.5%
-20.0%
-2.1%
95.7%
21.8%
0.5%
42.0%
-20.0%
-2.1%
96.9%
21.8%
0.5%
41.5%
-20.0%
-2.1%
97.8%
21.4%
1.0%
40.0%
-20.0%
-2.1%
105.1%
19.1%
7,798.1 7,800.0
3,236.2 3,120.0
2,050.2 1,934.0
-410.0
-386.8
1,640.2 1,547.2
1,640.2 1,547.2
1,186.0 1,186.0
-1,160.0 -1,246.0
0.8
1.6
-2.1%
-2.1%
n.a.
0.0
1,667.0 1,488.9
1,667.0 1,488.9
Value drivers
Consolidated sales yoy
EBITDA margin
Rate of taxes paid
Working capital/sales
Capex/depreciation
Free cash flow margin
WACC
2011e
2012e
2013e
2014e
2015e
2016e
TV CF
100.0%
0.0%
4.9%
6.5%
0.9
10.8%
8.0%
-20.0%
10.8%
100.0%
0.0%
5.5%
6.5%
0.9
11.4%
8.0%
-20.0%
11.4%
100.0%
0.0%
6.2%
6.5%
0.9
12.0%
8.0%
-20.0%
12.0%
100.0%
0.0%
7.1%
6.5%
0.9
12.9%
8.0%
-20.0%
12.9%
100.0%
0.0%
7.9%
6.5%
0.9
13.8%
8.0%
-20.0%
13.8%
100.0%
0.0%
7.8%
6.5%
0.9
13.6%
8.0%
-20.0%
13.6%
100.0%
0.0%
5.2%
6.5%
0.9
11.1%
7.0%
-20.0%
11.1%
WACC
-0.5%
0.0%
0.5%
9.6%
10.1%
10.6%
11.1%
11.6%
12.1%
12.6%
236.9
228.6
221.2
214.3
208.0
202.2
196.9
243.6
234.7
226.6
219.2
212.4
206.3
200.5
251.1
241.4
232.5
224.6
217.3
210.6
204.5
17.6%
18.1%
18.6%
248.5
238.6
229.6
221.6
214.2
207.6
201.5
252.2
242.0
232.8
224.5
217.0
210.2
203.9
255.9
245.4
236.0
227.5
219.8
212.8
206.4
Target capital structure (at MV)
Debt/equity ratio (at MV)
Risk free rate (local)
Equity market premium
Levered beta
Cost of equity
Cost of debt
Tax rate
WACC
Sensitivity analysis
Growth sensitivity (HKR)
Terminal growth rate
1.0%
1.5%
259.5
248.8
239.1
230.4
222.6
215.4
208.8
269.0
257.1
246.4
236.9
228.4
220.6
213.5
2.0%
2.5%
279.6
266.4
254.6
244.2
234.8
226.3
218.7
291.8
276.9
263.8
252.2
241.9
232.7
224.3
20.1%
20.6%
266.9
255.6
245.5
236.4
228.1
220.6
213.7
270.5
259.0
248.6
239.3
230.9
223.2
216.1
Margin sensitivity (HKR)
WACC
9.6%
10.1%
10.6%
11.1%
11.6%
12.1%
12.6%
Source: Raiffeisen Centrobank estimates
51
FCF margin TV
19.1%
19.6%
259.5
248.8
239.1
230.4
222.6
215.4
208.8
263.2
252.2
242.3
233.4
225.3
218.0
211.3
Hrvatski Telekom
Company description
T-Hrvatski Telekom (T-HT) is the leading integrated telecommunication operator in Croatia,
offering more than 1.3 mn fixed lines, with 2.5 mn mobile customers and 650k broadband
connections. At the end of FY 2009, the company’s wireline and wireless units were merged.
T-HT holds a 39.1% and 30.3% stake in HT Mostar and HTP Mostar, respectively. HT Mostar
provides integrated telecommunication services in Bosnia and Herzegovina. HTP Mostar is
a postal services company. Internet service provider Iskon and the cable operator KDS are
the other important 100% owned subsidiaries. There are about 7 active competitors (e.g.
Optima, H1, Metronet) operating in the fixed line voice services segment and several active
Internet providers. The cable operator B.net is the main competitor in the TV segment. T-Mobile
had a market share of 45% by the number of SIM cards at the end of 3Q 11. The other two
mobile operators Vipnet (owned by Telekom Austria) and Tele 2 had market shares of about
40% and 15%, respectively, based on the number of subscribers at the end of 3Q 11.
3Q 2011
2Q 2011
1Q 2011
Revenues structure 4Q 2010
3Q 2010
2Q 2010
4.0%
1Q 2010
Top line development
50.0%
1-3Q2010
45.0%
1-3Q2011
40.0%
35.0%
30.0%
2.0%
25.0%
0.0%
20.0%
-2.0%
15.0%
-4.0%
10.0%
-6.0%
5.0%
-8.0%
0.0%
Mobile
FL voice
Wholesale
Internet
Data
Source: HT, Raiffeisen Centrobank
Source: HT, Raiffeisen Centrobank
Shareholder structure
Capex as % of revenues
ICT
22.0%
20.0%
Free float 38.4%
18.0%
16.0%
Deutsche Telekom 51.0%
War Veterans' Fund 7.1%
Pensioners' Fund 3.5%
14.0%
12.0%
10.0%
2008
2009
2010
Source: HT, Raiffeisen Centrobank estimate
Source: HT, Raiffeisen Centrobank
52
2011e
2012e
Hrvatski Telekom
Income statement (HRK mn)
12/2008
12/2009
Consolidated sales
Changes in inventories & own work capitalised
Other operating income
Total revenues
Material costs
Personnel expenses
Other operating expenses
EBITDA
Adjusted EBITDA
Depreciation of PPE and intangibles
EBITA
Amortisation, impairment of goodwill
EBIT
Adjusted EBIT
Investment income
Net interest income
Other financial result
Financial result
Earnings before taxes
Taxes on income
Extraordinary result
Net profit before minorities
Minority interests
Net profit after minorities
Adjusted Net profit
8,816.0
0
274.0
9,090.0
-3,987.0
-1,202.0
47.0
3,948.0
3,966.0
-1,346.0
2,602.0
0.0
2,602.0
2,620.0
0.0
322.0
18.0
340.0
2,942.0
-632.0
0.0
2,310.0
0.0
2,310.0
2,310.0
8,517.0
0
382.0
8,899.0
-2,320.0
-1,302.0
-1,582.0
3,695.0
3,858.0
-1,402.0
2,293.0
0.0
2,293.0
2,456.0
0.0
261.0
12.0
273.0
2,566.0
-542.0
0.0
2,024.0
-1.0
2,023.0
2,153.4
8,375.0
0
341.0
8,716.0
-2,327.0
-1,198.0
-1,529.0
3,662.0
3,662.0
-1,415.0
2,247.0
0.0
2,247.0
2,247.0
0.0
26.0
2.0
28.0
2,275.0
-444.0
0.0
1,831.0
0.0
1,831.0
1,831.0
8,019.0
0
350.0
8,369.0
-2,309.5
-1,312.8
-1,339.2
3,407.6
3,569.6
-1,350.5
2,057.1
0.0
2,057.1
2,219.1
0.0
77.0
10.0
87.0
2,144.1
-428.8
0.0
1,715.2
0.0
1,715.2
1,844.8
7,562.6
0
350.0
7,912.6
-2,193.2
-1,102.5
-1,315.9
3,301.1
3,301.1
-1,280.4
2,020.7
0.0
2,020.7
2,020.7
0.0
80.8
10.0
90.8
2,111.4
-422.3
0.0
1,689.1
0.0
1,689.1
1,689.1
7,621.7
0
350.0
7,971.7
-2,240.8
-1,103.3
-1,310.9
3,316.7
3,316.7
-1,227.9
2,088.7
0.0
2,088.7
2,088.7
0.0
85.9
10.0
95.9
2,184.7
-436.9
0.0
1,747.8
0.0
1,747.8
1,747.8
Changes yoy
12/2008
12/2009
12/2010
12/2011e
12/2012e
12/2013e
-0.2%
1.6%
3.1%
3.1%
-4.9%
-6.7%
-3.4%
-6.4%
-11.9%
-11.9%
-12.8%
-12.4%
-1.7%
-0.9%
-2.0%
-2.0%
-11.3%
-9.5%
-4.3%
-6.9%
-8.5%
-8.5%
-5.8%
-6.3%
-5.7%
-3.1%
-1.8%
-1.8%
-1.5%
-1.5%
0.8%
0.5%
3.4%
3.4%
3.5%
3.5%
12/2008
12/2009
12/2010
12/2011e
12/2012e
12/2013e
-45.2%
44.8%
29.5%
29.5%
33.4%
26.2%
-27.2%
43.4%
26.9%
26.9%
30.1%
23.8%
-27.8%
43.7%
26.8%
26.8%
27.2%
21.9%
-28.8%
42.5%
25.7%
25.7%
26.7%
21.4%
-29.0%
43.7%
26.7%
26.7%
27.9%
22.3%
-29.4%
43.5%
27.4%
27.4%
28.7%
22.9%
12/2007
12/2008
12/2009
12/2010e
12/2011e
12/2012e
15.3%
18.5%
18.6%
13.9%
16.5%
16.8%
13.3%
15.9%
16.2%
12.8%
15.6%
15.6%
12.9%
15.6%
15.6%
13.5%
16.3%
16.3%
Cash flow statement (HRK mn)
12/2008
12/2009
12/2010
12/2011e
12/2012e
12/2013e
Earnings before taxes
Taxes paid
Amortisation and depreciation
Other non-cash items
Cash flow from result
Change in working capital
Operating cash flow
Capex PPE and intangible assets
Acquisitions
Disposal of fixed assets (total)
Other items (investments)
Investing cash flow
Dividend payments
Other changes in equity
Change in financial liabilities
Other items
Financing cash flow
Source: HT, Raiffeisen Centrobank estimates
2,881.0
-576.2
1,336.9
0.0
3,641.8
-353.7
3,288.1
-1,624.0
0.0
0.0
0.0
-1,624.0
-2,421.0
4.0
-20.0
0.0
-2,437.0
2,566.0
-542.0
1,402.0
-370.0
3,056.0
-318.0
2,738.0
-1,553.0
0.0
0.0
245.0
-1,308.0
-2,456.0
0.0
0.0
-2.0
-2,458.0
2,275.0
-466.0
1,319.0
74.0
3,202.0
64.0
3,266.0
-1,153.0
-176.0
0.0
-60.0
-1,389.0
-2,788.0
0.0
0.0
-4.0
-2,792.0
2,144.1
-428.8
1,350.5
33.0
3,098.8
69.1
3,167.9
-1,002.4
0.0
0.0
0.0
-1,002.4
-1,863.8
0.0
-13.0
0.0
-1,876.8
2,111.4
-422.3
1,280.4
-14.0
2,955.6
-148.7
2,806.9
-983.1
0.0
0.0
0.0
-983.1
-1,842.5
0.0
0.0
0.0
-1,842.5
2,184.7
-436.9
1,227.9
-19.0
2,956.7
-1.7
2,955.0
-1,028.9
0.0
0.0
0.0
-1,028.9
-1,801.5
0.0
0.0
0.0
-1,801.5
Consolidated sales yoy
EBITDA yoy
EBITA yoy
EBIT yoy
EBT yoy
Net profit after minorities yoy
Margins
Material costs margin
EBITDA margin
EBITA margin
EBIT margin
EBT margin
Net margin
Profitability
Return on assets
Return on equity
Return on capital employed
53
12/2010 12/2011e 12/2012e
12/2013e
Hrvatski Telekom
Balance sheet (HRK mn)
12/2008
12/2009
12/2010 12/2011e 12/2012e
Current assets
Liquid funds
Receivables
Inventories
Other assets
Fixed assets
Property, plant & equipment
Intangible assets
Goodwill
Financial assets
Deferred tax assets
Total assets
Current liabilities
Short-term borrowings
Notes & trade payables, payments received
Other current liabilities
Long-term liabilities
Long-term borrowings
Long-term provisions
Other long-term liabilities
Hybrid & other mezzanine capital
Shareholders' equity
Minority interests
Deferred tax liabilities
Total liabilities
7,185.0
5,436.0
1,330.0
314.0
105.0
7,934.0
6,428.0
972.0
77.0
457.0
60.0
15,179.0
2,298.0
3.0
1,590.0
705.0
441.0
21.0
292.0
128.0
0.0
12,440.0
0.0
0.0
15,179.0
6,297.0
4,454.0
1,505.0
255.0
83.0
8,129.0
6,507.0
1,022.0
77.0
523.0
46.0
14,472.0
1,904.0
0.0
1,643.0
261.0
556.0
0.0
428.0
128.0
0.0
12,012.0
0.0
0.0
14,472.0
5,577.0
3,747.0
1,504.0
216.0
110.0
7,951.0
6,336.0
1,000.0
162.0
453.0
57.0
13,585.0
2,121.0
13.0
1,529.0
579.0
410.0
43.0
293.0
74.0
0.0
11,054.0
0.0
0.0
13,585.0
5,587.0
4,017.0
1,281.4
178.6
110.0
7,305.6
5,882.2
808.4
162.0
453.0
57.0
12,949.6
1,768.4
0.0
1,239.4
529.0
429.0
43.0
312.0
74.0
0.0
10,752.1
0.0
0.0
12,949.6
5,722.9
4,141.5
1,291.4
180.0
110.0
7,106.6
5,732.9
758.7
162.0
453.0
57.0
12,886.4
1,778.1
0.0
1,249.1
529.0
410.0
43.0
293.0
74.0
0.0
10,698.3
0.0
0.0
12,886.4
Balance sheet (HRK mn)
12/2008
12/2009
12/2010 12/2011e 12/2012e
12/2013e
Net working capital
Net interest-bearing debt
Capital employed
Market capitalisation
Enterprise value
-546.0
-5,412.0
12,464.0
16,313.8
10,534.8
-61.0
-4,454.0
12,012.0
22,493.1
17,672.1
-278.0
-3,733.0
11,110.0
23,696.9
19,583.9
-198.4
-4,016.0
10,795.1
19,711.7
15,315.8
-196.7
-4,140.5
10,741.3
19,711.7
15,191.3
Financing (x)
12/2008
12/2009
12/2010 12/2011e 12/2012e
12/2013e
126.6
2.0
-43.5%
3.0
1.6
1.2
82.0%
99.9
1.8
-37.1%
3.2
1.5
1.1
83.0%
12/2008
12/2009
81.9
28
28
40
152
30
106.3%
81.9
25
26
33
147
34
137.8%
12/2008
12/2009
7.1
7.1
5.0
1.3
15.1%
10.2%
1.2
2.7
4.0
3.2
1.3
11.1
10.4
8.2
1.9
12.4%
5.3%
2.1
4.8
7.7
6.5
1.9
Interest cover
Internal financing ratio
Net gearing
Quick ratio
Fixed assets cover
Capex / depreciation
Equity ratio
Per share data (HRK)
Weighted avg. no. of shares (mn)
EPS reported
Earnings per share (adj.)
Operating cash flow per share
Book value per share
DPS
Payout ratio
Valuation (x)
PE reported
Adjusted PE ratio
Price cash flow
Price book value
Dividend yield
Free cash flow yield
EV/sales
EV/EBITDA
EV/EBIT
EV/operating cash flow
Adjusted EV/CE
Source: HT, Raiffeisen Centrobank estimates
54
83.0
2.8
-33.8%
2.5
1.4
0.8
81.4%
5,693.8
4,035.7
1,358.8
189.3
110.0
7,602.9
6,097.9
890.0
162.0
453.0
57.0
13,353.7
2,005.2
0.0
1,314.2
691.0
443.0
43.0
326.0
74.0
0.0
10,905.5
0.0
0.0
13,353.7
-347.1
-4,034.7
10,948.5
19,781.0
15,366.3
1,124.5
2.9
-37.4%
3.1
1.5
0.8
83.0%
1,131.4
2.9
-38.7%
3.1
1.6
0.8
83.0%
12/2010 12/2011e 12/2012e
12/2013e
81.9
22
22
40
135
23
101.8%
1,006.6
3.2
-37.0%
2.7
1.5
0.7
81.7%
12/2013e
81.9
21
21
34
131
22
106.7%
81.9
21
21
36
131
21
100.7%
12/2010 12/2011e 12/2012e
12/2013e
12.9
12.9
7.3
2.1
7.9%
8.9%
2.3
5.3
8.7
6.0
2.1
81.9
21
23
39
133
22
107.4%
11.5
10.7
6.2
1.8
9.3%
10.9%
1.9
4.5
7.5
4.9
1.8
11.7
11.7
7.0
1.8
9.1%
9.3%
2.0
4.6
7.6
5.5
1.8
11.3
11.3
6.7
1.8
8.9%
9.8%
2.0
4.6
7.3
5.1
1.8
Hrvatski Telekom
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