Telekom Slovenije published its FY 2021 results on Thursday, showing roughly the same revenue YoY, a 5.2% YoY increase in EBITDA, and a net profit of EUR 37.8m, an increase of 52.3% YoY. 

In 2021, Telekom Slovenije recorded sales in the amount of EUR 648.2m, representing a 0.17% YoY increase, representing the first time it experienced an increase in sales in the last five years. The main drivers of the revenue increase were IPKO, a higher number of expatriates vacationing in Slovenia due to milder COVID restrictions in 2021, and revenues in the wholesale market coupled with the end-user market mobile segment performing well.

IPKO recorded higher revenues in 2021 than in the previous year, the company is attracting new users through intensive marketing activities. Even though Covid restrictions affected the company in 2021 they were far less strict than in 2020, which resulted in a higher number of expatriates coming back to Slovenia during the vacationing periods and thus increasing the overall traffic and revenue. Furthermore, revenues in the wholesale market were higher than in 2020, primarily due to higher revenues from the roaming of foreign users in the mobile networks of Telekom Slovenije and IPKO as well as higher revenues from incoming international traffic at IPKO. Also, the sale of mobile merchandise also had a positive effect on the Company’s revenue.

On the other hand, international voice traffic and traffic from the roaming by foreign users in the Company’s mobile network were still lower than in the pre-pandemic period. Revenues were also lower in the fixed segment of the end-user market due to a decline in revenues from traditional voice telephony. This came as a result of the falling number of traditional connections and their replacement with mobile and IP telephony. Finally, revenues were lower due to a stagnating sale of licenses, which resulted in lower costs of subcontractors.

EBITDA increased by 5.18% YoY, amounting to EUR 220.7m. The increase in EBITDA resulted from the overall 1.7% decrease in OPEX, which when we take a close look was supported by the large decrease in Cost of Services, which amounted to -9.5% YoY. Apart from that, labour costs remained almost unchanged while COGS and Cost of materials and energy increased by 3.9% and 13.4%, respectively.

Meanwhile, net profit increased from EUR 24.8m to 37.8m in 2021 (+52.3% YoY), as there were no negative effects from discontinued operations recorded in this period. As a reminder, in 2020 Telekom Slovenije was heavily impacted by the loss from discontinued operations and the effect of the sale of Planet TV, which is one of the reasons that explain such a surging increase in net profit in 2021. IPKO – Kosovo’s net income amounted to EUR 11.8m, representing 31% of the total net profit of the Group.

CAPEX-wise, Telekom Slovenije invested EUR 208m during 2021, marking a 20.3% YoY increase. The majority of investments in 2021 were allocated for the expansion of the fiber optic access network, which will provide users with a superior user experience in terms of broadband content and high-speed internet access. Investments were also made into the modernization of the mobile network and the establishment of the first national 5G mobile network, as well as the development of new services and the further optimization of operations.

Telekom Slovenije key financials (2017 – 2021, EURm)

Business Strategy 2022 – 2026 and 2022 Financial Objectives

Telekom Slovenije also reaffirmed its strategy for the 2022 – 2026 period, outlining the most important objectives for the Company. Firstly, the Company wants to be the leader in the user experience, further digitalizing its operations by digitalizing key business processes involving users. Furthermore, the Company plans to grow its ICT services, and stabilize the level of revenue from the core activity in Slovenia.

Also, they plan wants to consolidate on the individual markets which would further push the whole sector and a company into the latter stages of the mature industry.  Moreover, they plan to continue optimizing employee structure and will continue to work on financial stability and optimization of all types of costs while creating a sustainable future.

Telekom Slovenije 2022 Financial Objectives (EURm)