Greek Market Watch: OTE Results 2Q24, Eurobank/Hellenic Bank, Coca Cola results 1H24, Jumbo

Today’s Headlines

·         OTE 2Q2024 Review | Results broadly in line with our estimates

·         Eurobank extends its participation in Hellenic Bank to 55.96% after the public offer

·         Coca Cola HBC 1H24 results out-missed estimates, upgrades guidance

·         Jumbo sales increased by c. 2% y-o-y in July

MARKET COMMENT

ATHEX jumped for a 2nd consecutive session yesterday, in line with the European stock markets. In more detail, the General Index jumped by 1.94% at 1,394.29 units (FTSE Large Cap: +1.81%, FTSE Mid Cap: +2.72% Banks Index: +2.96%) and the traded value was shaped at EUR 107.1m, down from Tuesday’s EUR 161.2m. We expect ATHEX to consolidate at current levels today, following the recent gains; all eyes remain on the developments in the Middle East and the international markets.   

HEADLINES

Company Headlines

OTE || NEUTRAL | CP: EUR 14.70 | TP: EUR 15.10

2Q2024 Review | Results broadly in line with our estimates   

Optima View: OTE delivered a mixed set of results that came broadly in line with our estimates. Performance in Greece was in line with our estimates but in Romania was once more weaker than expected. We reiterate our Neutral rating on valuation grounds since the upside potential is limited from current levels.  

2Q24 results: Group revenues reached EUR 910.7m (+6% y-o-y), broadly in line with our estimate of EUR 914.3m. Revenues in Greece rose by 7.6% y-o-y to EUR 846.1m, driven by mobile service revenues (+3.7% y-o-y), wholesale revenues (+10.3% y-o-y) and other revenues/ICT, handset (+21.7% y-o-y), whilst retail fixed services were flattish, as FTTH subscribers skyrocketed by 67.5% y-o-y to 325,308, TV subscribers rose by 6.2% y-o-y, while mobile subscribers dropped by 1.9% y-o-y. On the other side, revenues in Romania fell by 3.8% y-o-y to EUR 66.7m. Group adj. EBITDA AL was shaped at EUR 326.7m (0% y-o-y), in line with our estimate of EUR 328.2m and the respective margin narrowed to 35.9% from 38.2% in 2Q23. EBITDA in Greece rose by 1.5% y-o-y to EUR 326.8m, whilst Romania posted negative EBITDA of EUR 100m. Below the EBITDA line, depreciation expenses came in at EUR 154.0m (-10% y-o-y), below our estimates of EUR 162.6m and net financial expenses came in at EUR 3.1m, lower than our estimate of EUR 4.6m. Hence, group net profit came in at EUR 125.9m (+12.5% y-o-y), 3% above our estimate of EUR 121.9m.

Cash Flow/Net Debt: 2Q24 Free Cash Flow (AL) decreased by 15.8% y-o-y to EUR 121.2m and adjusted Capex also narrowed by 6.4% y-o-y to EUR 156.1m. Net debt increased by 17.0% y-o-y to EUR 457.0m.

1H2024 results: Group revenues reached EUR ca1.79bn (+7.7% y-o-y), adjusted EBITDA after lease EUR 650.4m (-0.2% y-o-y), with the respective margin at 36.5% vs. 39.2% in 1H23 and finally net profit landed at EUR 260.7m (+5.5% y-o-y).  

Guidance 2024: Management reiterated FCF 2024 guidance of EUR 470m and Capex in the range of EUR 610m-620m.   

New CEO: The new CEO stated that the company will pursue its investments in fiber, 5G and TV content and accelerate their monetization.

Management stated yesterday during the CC the following:

·         ICT (RRF funded) solid pipeline. Double digit growth to continue in 2H24

·         Expects Greek mobile service revenues to grow by c3% in 2024

·         Wholesale FTTH agreement: Final stage to formalize the agreement with Vodafone and Nova. Vodafone will sign the agreement next week. Discount up to 28% depending on volumes vs the regulated price of EUR 20-30

·         Cross agreement with Nova TV to grow regulated market after years of anemic growth. Subscribers to pay EUR 3/month to watch nova sports content and vice versa

·         FTTH coupon of EUR 200 to increase demand

·         Expects 2025 revenues to increase on higher wholesale, FTTH and Pay TV revenues

·         VES programm to continue in the next couple of years

Eurobank extends its participation in Hellenic Bank to 55.96% after the public offer

Eurobank announced that following the completion of the mandatory public offer for the acquisition of Hellenic Bank, it now holds 55.962% of total shares (231mio shares) of the target company. 

Coca Cola HBC 1H24 results out-missed estimates, upgrades guidance

Coca-Cola HBC announced sales volume of 1,426.37m unit cases (+3.2% YoY) and revenues of EUR 5,175.6m (+3.1% y-o-y, 6.9% below consensus) for the first half of 2024. Per geography: a) Established: Organic revenue increased by 4.4% ed by revenue-per-case expansion and a resilient volume performance. Organic EBIT expanded 11.1 b) Developing: Organic revenue up 11.5%, driven by revenue-per-case expansion, as well as volume growth; organic EBIT up 62.3% c) Emerging: Organic revenue up 22.7% as we utilised revenue growth management initiatives to navigate FX headwinds in Nigeria and Egypt, and continued to drive solid volume growth; organic EBIT down 8.6%. Regarding group profitability, comparable EBITDA was down 1.4% at EUR 758.6m, missing Bloomberg consensus by 12.9%, Net Profits were also down +1.1% YoY at EUR 381.6m (9% below consensus) and FCF dropped by EUR 14.2% to EUR 220.2m on weaker operating cash flow generation.  The management upgraded the annual guidance, expecting organic revenue growth of 8-12% (vs. 6-7% previously and organic EBIT growth of 7-12% (previously 3-9%).

Jumbo sales increased by c. 2% y-o-y in July

Jumbo announced yesterday that July sales rose by around 2% y-o-y and issued new lower guidance for sales growth of 4% in FY24 and for profitability to remain at the same level as FY23, due to increased tension in the Middle East combined with delays in product shipments in the critical second half of the year.  The closure of the Suez Canal now looks set to impact the whole of 2024 by doubling product delivery time and increasing costs. In July, sales in Greece increased by c. 3% y-o-y, sales in Cyprus decreased by c. 10% y-o-y, sales in Bulgaria remained almost unchanged y-o-y, while sales in Romania increased by c. 7% y-o-y. In addition, in 7M24, Group sales increased by c. 7% y-o-y, with Greek sales increasing by c. 7% y-o-y, Cypriot sales increasing by c. 1% y-o-y, Bulgarian sales increasing by c. 9% y-o-y and Romanian sales increasing by c. 13% y-o-y. The news is negative and the tension in the Middle East will continue to affect the company’s outlook.

CALENDAR OF EVENTS

Macros

09/08/24 | CPI JUL & Industrial Production JUN

12/08/24 | Evolution of Turnover of Enterprises 2Q24 & JUN

14/08/24 | Import Price Index in Industry JUN

20/08/24 | Current Account Balance JUN & Turnover Index in Industry JUN

Market

12/08/24 | MSCI Quarterly Index Review announcement (Effective date: September 02, 2024)

2Q/1H24 Results Release

08/08/24 | Petropoulos, Ideal Holdings (Flash Note) (Bef-mkt)

09/08/24 | BriQ Properties, Intercontintal International

29/08/24 | HELLENiQ ENERGY (Aft-mkt), Austriacard Holdings

02/09/24 | Sarantis

03/09/24 | OPAP (Aft-mkt), Trade Estates (Aft-mkt)

04/09/24 | QUEST Holdings (Aft-mkt)

10/09/24 | Fourlis (Aft-mkt), Athens Airport (Aft-mkt)

11/09/24 | ElvalHalcor (Aft-mkt)

12/09/24 | Alpha Trust Andromeda

17/09/24 | Noval Property

18/09/24 | Cenergy Holdings

19/09/24 | Viohalco, Attica Bank, Alpha Real Estate, Lavipharm

20/09/24 | Premia Properties, Logismos

25/09/24 | ADMIE Holding (Bef-mkt), AS Company (Aft-mkt)

26/09/24 | EYDAP, INTERTECH

27/09/24 | Piraeus Port Authority, Alpha Trust Holdings, Alumil (Aft-mkt), Biokarpet, Ble Kedros, Sunrise Mezz Plc, Thessaloniki Water Supply (Aft-mkt), Orilina Properties, Phoenix Vega Mezz PLC, Trastor REIC

30/09/24 | Epsilon Net (Bef-mkt), Galaxy Cosmos Mezz Plc, Space Hellas, Technical Olympic (Aft-mkt), Athens Medical Center, Interlife, Medicon, Pairis

EGM / AGM

12/08/24 | Ble Kedros (AGM)

20/08/24 | Thessaloniki Water & Sewage Co. (AGM)

04/09/24 | ELVE (AGM), Moda Bagno (AGM)

06/09/24 | Domiki Kritis (AGM)

10/09/24 | Epsilon Net (AGM)

Ex-Dividend

19/08/24 | Ble Kedros

22/08/24 | KRI-KRI (EUR 0.35)

27/08/24 | Thessaloniki Water & Sewage Co.

29/08/24 | Real Consulting (EUR 0.04)

09/09/24 | ADMIE Holding (EUR 0.058)

12/09/24 | Evrofarma (EUR 0.05)

17/09/24 | Epsilon Net

Ex-Capital Return

26/08/24 | Biokarpet (EUR 0.02)

28/08/24 | GEK TERNA (EUR 0.25)

12/09/24 | Unibios (EUR 0.02)

Research Department
Equity Research

Τ: 210 8173 383 F: 210 3279 287 E: [email protected]

32 Aigialeias & Paradissou str., 15125, Maroussi optimabank.gr