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Rai Way
Earnings Release • Nov 14, 2019
4506_rns_2019-11-14_ffe3a6cd-ebce-41e8-873a-bf1786259ae2.pdf
Earnings Release
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RAI WAY APPROVES THE RESULTS FOR THE NINE MONTHS 2019: FURTHER MARGIN EXPANSION AND 5.6% INCREASE IN NET PROFIT
- Key results for the nine months ended 30 September 2019 (vs 30 September 2018 pro-forma1):
- Revenues of € 165.7m (+1.5%);
- Adjusted EBITDA of € 100.6m (+2.9%);
- Operating profit of € 70.4m (+6.2%);
- Net profit of € 49.7m (+5.6%);
- Investments of € 12.7m2
• Net debt of € 34.7m. Excluding the impact from the application of the new IFRS-16 accounting standard starting from 1 January 2019, the Company would have reported a positive net cash position of € 13.5m (compared to a positive net cash position of € 16.6m at 31 December 2018)
Rome, 14 November 2019 – The Board of Directors of Rai Way S.p.A. (Rai Way), met today under the chairmanship of Mario Orfeo, examined and unanimously approved the Company's Interim Financial Report for the nine months ended 30 September 2019.
1 It is recalled that starting from 1 January 2019 the new IFRS-16 accounting standard was applied. For this reason, it is considered appropriate to provide changes with respect to the economic data as of 30 September 2018 on a pro-forma basis, simulating the application of the aforementioned accounting principle from 1 January 2018, as it is considered more representative for the analysis of the Company's performance.
2 Excluding investments related to the application of new IFRS 16 Accounting Standard, equal to €0.3m
Key results for the nine months 2019
Starting from 1 January 2019, the new IFRS-16 accounting standard was applied. In order to better compare the performance of the Company, the 2018 economic figures are shown on a pro-forma basis, restated to simulate the impact of the application of this accounting standard:
| Eur Mln | 9M18 | 9M18 pro forma |
9M2019 | Δ % 9M19 vs. 9M18 |
Δ % 9M19 vs. 9M18PF |
|---|---|---|---|---|---|
| Core revenues | 163.3 | 163.3 | 165.7 | +1.5% | +1.5% |
| Adjusted EBITDA | 90.6 | 97.7 | 100.6 | +11.0% | +2.9% |
| EBITDA | 90.2 | 97.3 | 100.5 | +11.4% | +3.3% |
| Operating profit (EBIT) | 65.8 | 66.3 | 70.4 | +7.0% | +6.2% |
| Net profit | 47.2 | 47.0 | 49.7 | +5.3% | +5.6% |
The comments below refer to the comparison with the 2018 pro-forma data.
The Company's revenues amount to € 165.7 million, an increase of 1.5% over € 163.3 million for the nine months 2018. Revenues from RAI, equal to € 140.5 million, reflect the benefit from the CPI and the contribution for € 5.2 million from new initiatives. Revenues from third-party customers amount to € 25.2 million.
Adjusted EBITDA amounts to € 100.6 million, an increase of 2.9% over € 97.7 million for the nine months 2018 pro-forma, mainly benefiting from rising revenues and cost control. The margin on revenues reached 60.7% (59.8% in the nine months 2018 pro-forma). Considering the impact of non-recurring expenses (€ 0.1 million in the nine months 2019 compared to € 0.4 million in the nine months 2018), EBITDA3 amounts to € 100.5 million, representing an increase of 3.3% over € 97.3 million reported in the nine months 2018 pro-forma results.
Operating profit (EBIT) amounts to € 70.4 million, rising 6.2% over € 66.3 million of the nine months 2018 pro-forma, mainly due to the higher EBITDA and the benefit of € 1.6 million from the release of provision for risks.
3 The Company defines EBITDA as profit for the year adjusted by the following items: (i) income taxes, (ii) financial charges, (iii) financial income, (iv) accruals to provisions for risks, (v) amortisation and depreciation and (vi) writedowns of receivables
Net profit amounts to € 49.7 million, an increase of 5.6% over € 47.0 million of the nine months 2018 pro-forma.
In the nine months 2019, investments2 amount to € 12.7 million, of which € 5.8 million in development activities (€ 12.3 million in the nine months 2018, of which € 3.6 million in development activities).
Net invested capital4 amounts to € 205.0 million, with net debt closing at € 34.7 million including the impact from the application of the new IFRS-16 accounting standard for € 48.2 million. Excluding this impact, the Company would have reported a positive net cash position of € 13.5 million (positive net cash position of € 16.6 million at 31 December 2018) mainly due to the strong cash generation offset by the dividend payment.
Outlook
The results of the first nine months of 2019 are in line with Company's expectations. The outlook for the full year 2019, disclosed to the market on 14 March 2019, is therefore confirmed.
In particular, Rai Way is forecasting:
- Adjusted EBITDA to continue to grow organically;
- Maintenance capex on core revenues ratio substantially in line with 2018 figure.
Rai Way announces that today, Thursday 14 November 2019 at 5:30pm CET the results of the nine months 2019 will be presented to the financial community via conference call. The presentation supporting the conference call will be made available in advance on the Company's website www.raiway.it in the Investor Relations section. To take part in the conference call: Italy: +39 02 8020911 - UK: +44 1 212818004 - USA: +1 718 7058796
***
4 Net invested capital is calculated as the sum of fixed capital, working capital and non-current financial assets
***
The manager in charge of preparing the corporate accounting documents, Adalberto Pellegrino, declares, pursuant to article 154-bis of the Consolidated Finance Law (TUF), that the accounting information in this release corresponds to the underlying accounting documents, books and entries.
Disclaimer
This release contains forward-looking statements on the future events and results of Rai Way that are based on current expectations, estimates and forecasts about the sector in which Rai Way operates and on management's current opinions. By their nature these items contain an element of risk and uncertainty as they depend on the occurrence of future events. The actual results could differ, even materially, from those stated for a variety of reasons such as: global economic conditions, the effect of competition and political, economic and regulatory developments in Italy.
Rai Way S.p.A.
Rai Way manages and develops the terrestrial broadcast infrastructure which carries the television and radio signals of RAI, Italy's national public broadcasting company, and provides services to its business customers. Rai Way has an extensive experience and technological, engineering and organizational know-how in the Italian media and broadcast infrastructure market. Such a unique expertise, together with the skills and ongoing training of its more than 600 employees, makes Rai Way an ideal partner for any companies and entities seeking for integrated solutions to develop their network and transmit their signals.
Rai Way operates throughout the national territory and can rely on its headquarters in Rome, 21 local network centers and more than 2,300 sites across Italy.
For more information:
Investor Relations
Ph. +39 06 33173973 Ph. +39 06 33174815 [email protected] Media Relations SEC and Partners Giancarlo Frè Ph. +39 06 3222712 [email protected]
Income Statement
| (€m; %) | 3Q18 | 3Q18PF(1) | 3Q19 | 9M18 | 9M18PF(1) | 9M19 |
|---|---|---|---|---|---|---|
| Core revenues | 54.3 | 54.3 | 55.3 | 163.3 | 163.3 | 165.7 |
| Other revenues and income | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 |
| Purchase of consumables | 0.1 | 0.1 | (0.2) | (0.6) | (0.6) | (0.8) |
| Cost of services | (12.5) | (10.1) | (10.0) | (37.3) | (30.2) | (30.1) |
| Personnel costs | (9.9) | (9.9) | (9.6) | (32.9) | (32.9) | (32.7) |
| Other costs | (0.7) | (0.7) | (0.6) | (2.4) | (2.4) | (1.7) |
| Opex | (23.1) | (20.6) | (20.5) | (73.1) | (66.0) | (65.3) |
| Depreciation, amortization and write-downs | (8.2) | (10.4) | (10.7) | (24.4) | (31.0) | (31.6) |
| Provisions | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 1.6 |
| Operating profit (EBIT) | 23.1 | 23.3 | 24.2 | 65.8 | 66.3 | 70.4 |
| Net financial income (expenses) | (0.3) | (0.6) | (0.4) | (1.0) | (1.7) | (1.0) |
| Profit before income taxes | 22.7 | 22.7 | 23.8 | 64.8 | 64.6 | 69.4 |
| Income taxes | (6.5) | (6.5) | (6.7) | (17.6) | (17.5) | (19.7) |
| Net Income | 16.3 | 16.3 | 17.1 | 47.2 | 47.0 | 49.7 |
| EBITDA | 31.2 | 33.7 | 34.8 | 90.2 | 97.3 | 100.5 |
| EBITDA m argin |
57.6% | 1.2% | 63.0% | 55.2% | 59.6% | 60.6% |
| Non recurring costs | (0.2) | (0.2) | (0.1) | (0.4) | (0.4) | (0.1) |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 31.4 | 33.9 | 34.9 | 90.6 | 97.7 | 100.6 |
| Adjusted EBITDA m argin |
57.9% | 62.4% | 63.2% | 55.5% | 59.8% | 60.7% |
Balance Sheet
| (€m) | 2018FY | 9M2019 |
|---|---|---|
| Non current assets | ||
| Tangible assets | 180.9 | 169.5 |
| Rights of use for leasing | 0.0 | 42.3 |
| Intangible assets | 12.9 | 12.5 |
| Financial assets, holdings and other non-current assets | 1.3 | 1.3 |
| Deferred tax assets | 3.3 | 2.8 |
| Total non-current assets | 198.5 | 228.4 |
| Current assets | ||
| Inventories | 0.9 | 0.9 |
| Trade receivables | 71.5 | 80.5 |
| Other current receivables and assets Current financial assets |
5.8 0.1 |
7.3 0.2 |
| Cash and cash equivalents | 17.2 | 13.8 |
| Current tax receivables | 0.1 | 0.1 |
| Total current assets | 95.5 | 102.8 |
| TOTAL ASSETS | 294.0 | 331.1 |
| Shareholders' Equity | ||
| Share capital | 70.2 | 70.2 |
| Legal reserves | 14.0 | 14.0 |
| Other reserves | 37.1 | 37.1 |
| Retained earnings | 59.5 | 49.0 |
| Total shareholders' equity | 180.8 | 170.3 |
| Non-current liabilities | ||
| Non-current financial liabilities | 0.4 | 0.3 |
| Non-current leasing liabilities | 0.0 | 31.8 |
| Employee benefits | 15.1 | 14.8 |
| Provisions for risks and charges | 17.0 | 15.9 |
| Other non-current liabilities | 0.3 | 0.0 |
| Deferred tax liabilities | 0.0 | 0.0 |
| Total non-current liabilities | 32.8 | 62.8 |
| Current liabilities | ||
| Trade payables | 45.6 | 45.9 |
| Other debt and current liabilities | 33.9 | 33.6 |
| Current financial liabilities | 0.3 | 0.2 |
| Current leasing liabilities | 0.0 | 16.4 |
| Current tax payables | 0.6 | 1.9 |
| Total current liabilities | 80.4 | 98.0 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 294.0 | 331.1 |
Cash Flow Statement
| (€m) | 3Q2018 | 3Q2019 | 9M2018 | 9M2019 |
|---|---|---|---|---|
| Profit before income taxes | 22.7 | 23.8 | 64.8 | 69.4 |
| Depreciation, amortization and write-downs | 8.2 | 10.7 | 24.4 | 31.6 |
| Provisions and (releases of) personnel and other funds | 1.0 | 0.9 | 2.6 | 0.8 |
| Net financial (income)/expenses | 0.3 | 0.3 | 0.9 | 0.9 |
| (Retained earnings)/Losses carried forward - Effect of IFRS adoption | 0.0 | 0.0 | (0.8) | 0.0 |
| Net operating CF before change in WC | 32.2 | 35.7 | 91.8 | 102.7 |
| Change in inventories | 0.0 | 0.0 | 0.0 | 0.0 |
| Change in trade receivables | (10.7) | (1.2) | (13.0) | (9.1) |
| Change in trade payables | 3.0 | 3.5 | 0.1 | 0.3 |
| Change in other assets | (0.3) | (1.3) | (1.0) | (1.5) |
| Change in other liabilities | 1.7 | 3.6 | 6.1 | 3.6 |
| Use of funds | (0.0) | (0.0) | (0.8) | (0.3) |
| Payment of employee benefits | (0.5) | (0.6) | (2.6) | (2.6) |
| Change in tax receivables and payables | 0.3 | 0.0 | 0.3 | 0.2 |
| Taxes paid | (19.4) | (22.2) | (19.4) | (22.2) |
| Net cash flow generated by operating activities | 6.3 | 17.4 | 61.7 | 71.2 |
| Investment in tangible assets | (4.6) | (5.1) | (11.5) | (12.0) |
| Disposals of tangible assets | 0.0 | 0.0 | 0.0 | 0.0 |
| Investment in intangible assets | (0.3) | (0.2) | (0.8) | (0.8) |
| Disposals of intangible assets | 0.0 | 0.0 | 0.0 | 0.0 |
| Change in other non-current assets | 0.0 | (0.0) | (1.0) | 0.1 |
| Change in holdings | 0.0 | 0.0 | 0.0 | 0.0 |
| Change in non-current financial assets | 0.0 | 0.0 | 0.1 | 0.0 |
| Business combination | 0.0 | 0.0 | 0.0 | 0.0 |
| Net cash flow generated by investment activities | (4.9) | (5.3) | (13.2) | (12.6) |
| (Decrease)/increase in medium/long-term loans | (45.0) | (0.0) | (60.1) | (0.1) |
| (Decrease)/increase in current financial liabilities | 18.0 | (0.4) | 17.9 | (0.7) |
| (Decrease)/increase in IFRS 16 financial liabilities | 0.0 | (0.2) | 0.0 | (1.2) |
| Change in current financial assets | 0.2 | (0.1) | 0.0 | (0.2) |
| Net Interest paid | (0.3) | 0.0 | (0.5) | (0.1) |
| Dividends paid | 0.0 | 0.0 | (55.1) | (59.7) |
| Net cash flow generated by financing activities | (27.1) | (0.6) | (97.8) | (61.9) |
| Change in cash and cash equivalent | (25.7) | 11.5 | (49.2) | (3.4) |
| Cash and cash equivalent (beginning of period) | 32.4 | 2.3 | 55.9 | 17.2 |
| Cash and cash equivalent of newly consolidated companies (beginning of period) |
0.0 | 0.0 | 0.0 | 0.0 |
| Cash and cash equivalent (end of period) | 6.7 | 13.8 | 6.7 | 13.8 |