Today we decided to bring you an overview of the TTM EBITDA and profit margins of Slovenian companies

Over the course of November, Slovenian companies have been posting their updated 9M 2021 results. As a result, we decided to bring you an updated EBITDA and profit margin analysis. One thing that is important to point out is that comparing the margins across the selected companies is not necessarily the best way to do the comparison, considering that many companies operate in different industries. Since both EBITDA and profit margins reflect to a large extent the industry a certain company operates in, it is more advisable to use the peer average or median.

Even so, it is worth seeing which Slovenian companies are more profitable and therefore have a better position in managing their prices and services (reducing costs, increasing prices of goods/services) thus increasing these margins. It should also be noted that financials (Triglav, Sava Re, and NLB) were excluded from these comparisons

EBITDA (TTM) margin of Selected Slovenian Companies (%)

Out of the five observed companies, Telekom Slovenije recorded the highest TTM EBITDA margin at 34.2%. If we were to look at 9M 2021 vs. 9M 2020, the margin increases to 36.5%, a 3.4 p.p. increase YoY. This increase is mostly due to higher sales revenue as well as lower operating expenses. Next up, we have Krka, which recorded an EBITDA margin of 30%. When looking at 9M 2021 vs. 9M 2020, the Company experienced a 3.2 p.p. decrease YoY (33.15% to 29.98%). The main reason for the lower margin is the rising COGS. Following these two, we have Luka Koper and Cinkarna Celje, with EBITDA margins of 29% and 26.5% respectively. For Luka Koper, the increase in EBITDA of +7% YoY has come from the higher sales growth when compared to operating expenses growth. Even so, when looking at 9M 2021 vs. 9M 2020, the Company actually experienced a 41 bps decrease in the margin (from 27.52% to 27.11%), mostly due to sales revenue growing faster than EBITDA in this period.

For Cinkarna Celje, which experienced an EBITDA margin increase of 68% YoY, the increase comes from higher sales revenue due to higher value in titanium oxide (which increased by 10% YoY) as well as operating expenses remaining almost flat. At a 9M 2021 vs. 9M 2020 level, this represents a 9.7 p.p increase (from 12.46% to 22.14%). Lastly, we have Petrol, which had an EBITDA margin of only 5.9%, and considering the specificity of the industry the Company operates in, this comes as no surprise. At the 9M 2021 vs. 9M 2020 level, this represents a 72 bps increase YoY.

Profit (TTM) margin of Selected Slovenian Companies (%)

Taking a look into the TTM profit margins, we can see that Krka leads the way with 20.6%, followed by Cinkarna Celje with 16.7% and Luka Koper with 14.7%. If we were to break this down further to 9M 2021 vs. 9M 2020, we can see that Krka increased its margin by 2.3 p.p. (from 18.11% to 20.41%), Cinkarna Celje had an increase of 7.4 p.p. (from 10.55% to 17.92%), while Luka Koper experienced a slight decrease of -70 bps YoY.

On the flip side, we have Telekom Slovenije and Petrol, with 4.9% and 3.2% profit margins respectively, which when looked at as 9M 2021 vs. 9M 2020, represents a 125 bps (6.09% to 7.34%) and 120 bps (1.77% to 2.97%) increase respectively.

In the period from 24 Feb till 29 Nov 2021 the value of taxable invoices increased by 25.6% YoY amounting to 165.8 bn. The spending amount is 4.6% higher than spending in comparable period in 2019, still indicating positive sentiment. The value of last week’s taxable invoices is up 18.6% YoY and also compared to the week before it was up 9.9%.

By looking at the latest announcements from the Tax Administration of the Republic of Croatia, in the period from 24 Feb till 29 Nov 2021, the value of taxable invoices increased by 25.6% YoY amounting HRK 165.8bn. This growth in taxable invoices should be encouraging, especially taking into consideration that consumption is 4.6% higher in the comparable period in 2019 (25 Feb – 1 Dec 2019). Taxable invoices in wholesale and retail trade in the period from 24 Feb till 29 Nov 2021 grew by HRK 15.6 bn (16.6% YoY) and it is 6.6% above the value of spending level in this segment in the same period in 2019.
The value of taxable invoices in all segments in the week from 22 Nov to 28 Nov witnessed double-digit growth of 18.6% YoY. Compared to the same week in 2019 growth was also up by significant 18.9% beating pre-pandemic spending. In the last week (22 Nov to 28 Nov) the spending in wholesale and retail trade picked up 14.7% YoY. Meanwhile, it is important to note that the value of taxable invoices in wholesale and retail trade increased by 6.6% (HRK 6.81bn) when compared to the same period in 2019. This means that spending in Croatia, in a given period breached pre-pandemic spending, representing positive consumer expectations. In the last week in November taxable invoices in accommodation and food services increased by HRK 80.9bn, representing 56% YoY for that same week in 2020.
The value of taxable invoices in all segments in the week from 22 Nov to 28 Nov 2021, compared to the week before (15 Nov to 21 Nov 2012), was up 9.91%, while in wholesale and retail trade it was up 13%. When looking at the value of taxable invoices in accommodation and food services, it decreased by 9.15% compared to the week before (Nov 15- Nov 21 2021).

Telekom Slovenije receives a ruling and a decision regarding the commercial dispute of SKY NET vs. Telekom Slovenije

On November 29, Telekom Slovenije received a ruling and a decision of the Ljubljana Higher Court regarding the commercial dispute with SKY NET for the fulfillment of a contract according to two lawsuits ( in the total amount of EUR 33m), and because of the declaration of a void contract following a counterclaim (in the amount of EUR 25m).

With this ruling and decision, the Higher Court rejected the appeal of SKY NET and confirmed the ruling of the court in the first instance, which rejected the remaining part of the subordinate claim regarding the issued orders for the construction of 414 base stations and the orders for obtaining the documentation for 434 base stations. The court also ruled that SKY NET is obligated to reimburse Telekom Slovenije for the legal costs in the amount of EUR 39.6k, and the costs of the appeal procedure in the amount of EUR 5.48k.

The Higher Court also changed the ruling of the court of the first instance regarding the statement of claim of Telekom Slovenije for counterclaim relating to voiding the contract. The Higher Court has established that the contract concluded between the contracting parties in 2001 is null and void and has no legal effect. This ruling of the Higher Court means that the subordinate claim of SKY NET has been finally rejected.