How are Tim’s accounts going?

15 February 20243 months ago babelfish

All the numbers of Tim's preliminary results for the 2023 financial year and the fourth quarter.

Tim archives a 2023 with growing revenues and margins, but increases debt.

In 2023 the revenues of the telecommunications group led by Pietro Labriola (in the photo) amounted to 16.3 billion euros, an increase of 3.1% on 2022. The gross operating margin (Ebitda) stood at 6.4 billion euro, up 5.7% on an annual basis. This was announced by the company, whose Board of Directors yesterday examined the preliminary data as of 31 December 2023.

The group's fourth quarter results "allow us to reach or exceed the objectives set for the 2023 financial year, hitting, for the first time since 2010, all the guidance for the second consecutive financial year" underlines Tim's note on the preliminary results for 2023 .

Furthermore, the group's delayering plan, i.e. the sale of NetCo to the US fund KKR for a maximum of 22 billion euros, continues in line with the communicated timelines. The operation, opposed by Tim Vivendi's main shareholder , still has to pass the EU Antitrust examination. “We continue to be calm about the timing” CEO Labriola replied to a question on possible Antitrust issues at a European level regarding the unbundling of the network during the conference call with analysts on the preliminary final balance for 2023.

At the same time, Tim's board of directors approved the "long list" of candidates presented by President Salvatore Rossi, which will lead to the majority list for the renewal of the board, which will take place at the Assembly called to approve the 2023 budget, as well as the latter's proposal to submit further candidates for the role of President to the Council at the meeting in which the so-called "short list" will be examined.

The presentation of the new 2024-2026 industrial plan is scheduled for the Capital Market Day on March 7th.

All the details.

TIM, PLUS SIGN FOR REVENUES

As of December 31, 2023, total revenues of the Tim group increased by 3.1% to 16.3 billion euros, in line with analysts' expectations.

In reference to the fourth quarter, total group revenues increased by 1.9% to 4.3 billion euros, compared to the fourth quarter of 2022, while group services revenues increased by 3% to 4 billion thanks to positive contribution from Brazil (+8.2%) and the domestic sector (+1.2%), which returns to growth after 22 quarters.

The company said domestic service sales, which account for the majority of total group revenue, rose 1.2% year-on-year in the latest quarter, returning to growth for the first time in more than five years .

HOW ARE THE FOUR DIVISIONS OF THE GROUP GOING

As regards the four divisions of the group, Tim Enterprise recorded total revenues and revenues from services increasing by 4.6% and 5.1% respectively in the twelve months. Notably, cloud revenue surpassed 1 billion for the full year with a 31% jump.

NetCo, or the fixed network that Tim aims to sell to Krr, recorded total revenues growing by 3.7% in the twelve months and revenues from services essentially flat (-0.2%). The roll-out of fiber continues in line with the objective of reaching 48% coverage of real estate technical units by 2025. In the twelve months Tim Consumer recorded total revenues and services revenues down by 4.7% and 4.0%. 2%, albeit with a progressively improving trend (revenues from services -3.2% in the fourth quarter, -3.4% in the third, -4.9% in the second, -5.6% in the first).

For Tim Brasil, however, total revenues and services grew by 10.7% and 10.8% respectively in the twelve months and Ebitda by +14.7%.

MARGINS ARE GROWING…

In 2023 the group Ebitda is equal to 6.4 billion, up by 5.7% on year, with an incidence on revenues rising to 39.2% from 38.2% in the previous year, while the ebitda after lease is equal to 5.3 billion, an increase of 6.1%.

The growth trend of the group Ebitda also continues in the fourth quarter, reaching 1.6 billion euros (for an increase of 6.8% compared to 1.5 billion), with the Domestic business unit growing for the third quarter consecutive (+5.5%) and with Tim Brasil confirming its solid path (+9.5%), indicates the note.

BUT THE DEBT IS ALSO GROWING

As of 31 December 2023, net financial debt after lease stood at 20.3 billion euros, up by 300 million euros compared to 31 December 2022, but down by 835 million euros compared to the previous quarter.

In 2023, adjusted net financial debt also rose slightly to 25.66 billion euros, compared to 25.36 billion at the beginning of the year, better than the 25.75 billion of the analysts' consensus. The company explained in the note that the growth in debt is due to the net effect of the positive operating dynamics which were contrasted by the needs of financial and fiscal management, leasing debts and the payment of dividends in Brazil. The net accounting financial debt at the end of 2023 was equal to 25.78 billion euros.

On the same date, the liquidity margin was equal to 8.7 billion euros, a figure that allows coverage of the group's financial liabilities falling due for the next 24 months.

INVESTMENTS STABLE

Investments, the note continues, amounted to 4 billion euros at group level (4.08 billion in the previous year), of which 3.1 billion euros related to the domestic business.

POSITIVE HOME FLOW

In 2023, the cash flow from operational management (Operating Free Cash Flow) is positive by 2.6 billion euros, compared to the cash absorption of 0.6 billion in 2022, discounting in particular the payments for the acquisition of rights to use frequencies for telecommunications services in Italy and Brazil.

2023 Group Equity Free Cash Flow amounts to +0.8 billion euros, compared to +0.6 billion euros in fiscal 2022 and 2023 Group Equity Free Cash Flow After Lease, as in financial year 2022, is essentially zero.

THE COST CONTAINMENT PLAN CONTINUES

Finally, during the quarter, cost containment actions continued aimed at increasing the level of structural efficiency of TIM Domestic ('Transformation Plan', cumulative target of reducing cash costs of 1.5 billion euros by 2024 compared to to the inertial trend) reaching 106% of the incremental target of 800 million euros at the end of 2023. The cumulative reduction in the two-year period 2022-2023 was therefore equal to approximately 1.1 billion euros.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-vanno-i-conti-di-tim-2/ on Thu, 15 Feb 2024 11:49:49 +0000.