Earnings season continues, and this morning we got a Q2 report from euNetworks, which has long been our unencumbered window into the fiber infrastructure business over in western Europe. euNetworks posted a quarter of solid organic growth powered by another quarter of strong sales. Here is a quick table of their numbers in some context:
| in millions of €, UOS | Q2/14 | Q3/14 | Q4/14 | Q1/15 | Q2/15 |
|---|---|---|---|---|---|
| – Fibre | 4.6 | 5.1 | 5.8 | 6.1 | |
| – Wavelengths | 7.1 | 7.8 | 8.2 | 9.0 | |
| – Ethernet | 5.1 | 5.3 | 5.3 | 5.4 | |
| – Non-focus | 6.2 | 6.2 | 6.2 | 6.1 | |
| – Energy, Amortised, Other | 2.1 | 2.8 | 2.2 | 2.6 | |
| Total Revenue | 25.1 | 25.7 | 27.2 | 27.8 | 29.2 |
| Gross margin | 75.3% | 76.1% | 76.6% | 77.5% | 77.2% |
| Adj EBITDA | 7.0 | 7.5 | 7.5 | 7.6 | 8.2 |
| Adj EBITDA margin | 27.8% | 29.1% | 27.5% | 27.3% | 28.1% |
| Capital Expenditures | 6.9 | 8.8 | 6.1 | 9.2 | 9.8 |
| Proxy Cash Flow | 0.1 | (1.3) | 1.3 | (1.6) | (1.6) |
| New Sales (in thousands of €) | 788.1 | 630.8 | 783.7 | 789 | 796 |
| Installs (in thousands of €) | 661.6 | 688.9 | 734.8 | 585 | 774 |
| Monthly Incremental Service Revenue | 225.9 | 254.2 | 123.9 | 209 | 240 |
| Churn | 0.8% | 1.1% | 1.6% | 1.0% | 1.1% |
New Sales, Installs, and MISR each hit new highs during the quarter, promising a strong pipeline into Q3. Revenue growth from the company’s wavelength products was the big winner, trading places with fiber which took those honors in Q1. Overall, recurring revenue was up 4.9% sequentially and 16.2% over the same period last year. Capex was up again, as the company continues to pour its cash flow back into new opportunities.
euNetworks is no longer trading in Singapore, although the process to go fully private is still ongoing. But when they do finish with that, it should be interesting to see whether the company then moves to IPO in a market closer to home or whether its private equity backers at Columbia Capital use the freedom of being private to get more aggressive on the M&A trail.
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Categories: Financials · Metro fiber
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