Tele Columbus (TC1) Q2 2024 earnings summary

Executive summary

• Achieved fastest IP subscriber growth in Germany in Q2 2024, with net adds up 54% and IP revenue growth of 13.2% year-over-year, offsetting TV losses from regulatory bulk migration.

• Revenue for H1 2024 rose 0.6% year-over-year to €222.6m, driven by 11.1% growth in Internet & Telephony, despite a 10.9% decline in TV revenue.

• NetCo-ServCo separation and company reorganization are well advanced, aiming for greater transparency, efficiency, and future capital structure flexibility.

• Liquidity position better than planned, with €66m cash as of June 30, 2024, and further shareholder contribution pending.

• Net loss widened to €105.6m from €49.7m in H1 2023, mainly due to higher non-recurring expenses and negative financial result from refinancing.

Financial highlights

• Revenue stable at €222.6m year-over-year, with TV revenue declines offset by strong IP and hardware growth.

• Reported EBITDA for H1 2024 at €67.1m, impacted by non-recurring items; normalized EBITDA slightly increased by 0.2% to €93m year-on-year.

• CapEx rose 15% year-on-year, mainly due to consumer business growth investments and FTTH upgrades; Q2 CapEx up 14% to nearly €64m.

• Operating cash flow: €81.3m (up from €76.5m YoY); cash and cash equivalents increased to €65.6m from €23.2m at year-end.

• Non-recurring costs for the year expected at €40-50m, mainly from A&E transaction, NetCo-ServCo split, and bulk migration.

Outlook and guidance

• 2024 guidance adjusted: expects low single-digit percentage revenue decline, slight EBITDA increase, and improved liquidity versus original plan, reflecting lower conversion in migration campaigns and higher one-off expenses from faster group separation.

• Personnel costs expected to decrease in 2025 as transformation and restructuring complete.

• FTTH rollout to add 120,000 new fiber households in 2024, with further growth expected.

• Remaining €120m shareholder loan expected to be received in 2024.