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ZEGONA COMMUNICATIONS PLC ("Zegona")
LEI: 213800ASI1VZL2ED4S65
24 JULY 2020
Euskaltel Reports Record Profitability and Growth
Euskaltel yesterday published its results for the second quarter of 2020 and associated investor presentation. Highlights for the quarter communicated by Euskaltel included the following:
Strategic Roadmap Targets Exceeded
· Single efficient organisation in place - €40m annual run-rate efficiencies implemented
· Record profitability - Q2 EBITDA within the traditional business of €91.8 million
· Successful launch of National Expansion under the Virgin telco brand - Addressable households increased eightfold to nearly 19 million and record customer additions
Record Customer Growth
Euskaltel's mass market fixed customers increased by 11.3k in the quarter to 782k, with net additions of 4.8k within the traditional business and 6.5k for Virgin, the highest net additions since the company was publicly listed. The number of services delivered to customers also grew by a record amount.
Strong Financial Results and Cash Generation
The impact of Covid-19 on the business was limited, with growth achieved in the main financial metrics. Revenues increased year-on-year for the third consecutive quarter to €171.6m. EBITDA from the traditional business grew by 8.8% to €91.8m, driven by the cost efficiencies which have been delivered. Even after Virgin launch costs, EBITDA grew 3.7% to €87.5m. Euskaltel's operating cash flow grew over 10% to €50.9m, including the investment of €7.4m in the quarter to launch Virgin nationally, representing 29.6% of revenues.
Eamonn O'Hare, Zegona's Chairman and CEO commented: "These results demonstrate the excellent progress being made by the new management team at Euskaltel, combining a focus on operating efficiency within the existing business with driving significant growth through National Expansion under the Virgin brand. The whole team has responded brilliantly to the challenges created by Covid-19, delivering strong results for the business."
Further details on Euskaltel's second quarter 2020 results can be found on the Euskaltel website at https://www.euskaltel.com/CanalOnline/investors
Enquiries
Tavistock (Public Relations adviser)
Tel: +44 (0)20 7920 3150
Lulu Bridges - lulu.bridges@tavistock.co.uk
Jos Simson - jos.simson@tavistock.co.uk
About Zegona
Zegona was established in 2015 with the objective of investing in businesses in the European Telecommunications, Media and Technology sector and improving their performance to deliver attractive shareholder returns. Zegona holds an equity stake of over 21% in Euskaltel and is led by former Virgin Media executives Eamonn O'Hare and Robert Samuelson.
About Euskaltel
Euskaltel S.A. ("Euskaltel") is the leading converged telecommunications provider in the North of Spain and has recently expanded to offer services nationally. It provides high speed broadband, data rich mobile, advanced TV and fixed communications services to residential and business customers under the Euskaltel, R Cable, Telecable and Virgin telco brands. Euskaltel is a public company traded on the stock markets of Bilbao, Madrid, Barcelona and Valencia.
IMPORTANT NOTICES
Zegona is listed on the standard listing segment of the Official List of the Financial Conduct Authority and the Main Market for listed securities of the London Stock Exchange. This announcement has been prepared in accordance with English law, the Listing Rules and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.
The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.
Neither the content of https://www.euskaltel.com/CanalOnline/investors, nor the content on any website accessible from hyperlinks on Euskaltel's website or any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in Zegona.