In 9M 2019, the Group recorded a 6% decrease in sales, an increase in EBITDA of 9% and an increase in net profit of 25%.

In the first nine months of 2019, sales amounted to EUR 507.4m, representing a decrease of 6% YoY. However, the figures in 2019 no longer include the revenues generated by Blicnet, which was sold in 2018. If we were to adjust the sales for the Blicnet effect, sales were down 4% YoY. The mentioned decrease could be attributed to revenues from mobile merchandise on the end-user market, revenues from the fixed segment of the end-user market and revenues on the wholesale market were all being down in 9M 2019.

Operating expenses amounted to EUR 475.5m, which is a decrease of 8%, while when excluding the Blicnet effect, they are down 6% YoY. Such a decrease could mostly be attributed to lower costs of services, which were down by 16% or EUR 37.1m. This was primarily the result of changes in the recognition of costs arising from leases, which in accordance with the new accounting standard are no longer disclosed as costs of services.

Going further down the P&L, EBITDA amounted to EUR 166.2m, which is an increase of 9% or 11% when adjusting for the effect of Blicnet. Consequently, EBITDA margin went up by 4.3 p.p., amounting to 32.5%. Operating profit amounted to EUR 35.9m, representing an increase of 29% or (adjusted) 33%.

In the first nine months of 2019, Telekom Slovenije witnessed a net profit of EUR 29.4m, which is an increase of 25% or (adjusted) 28%.

Telekom Slovenije Performance (9M 2018 vs 9M 2019) (EUR m)

Besides the sale of Blicnet, it is worth noting that the company has launched the activities to sell off their 100% share in their Kosovo subsidiary IPKO Telecommunications in July 2019.

The company stated that this is in accordance with Telekom Slovenije Group’s strategy for the 2019–2023 period, which also includes the possibility of further consolidation through expansion or disinvestment in the markets where Telekom Slovenije Group operates.

As a reminder, Kosovo represents the company’s second-largest market, where the company observed a poor P&L performance in 9M 2019, resulting in operating revenues of EUR 46.55m (-15% YoY) EBITDA of EUR 23m (-1% YoY) and a net loss of EUR -0.62m.

Key objectives for 2019:

• Operating revenues: EUR 711.9m ( -3% YoY)
• EBITDA: EUR 216.0m (+16% YoY)
• Net operating profit: EUR 30.3m (-9% YoY)
• CAPEX: EUR 211.9m (+58% YoY)