While no longer publicly traded, euNetworks posts its financials and thus provides a pure-play look into the European infrastructure sector. This morning they posted Q1 results, holding firm sequentially on the top line and keeping nearly all of last quarter’s EBITDA gains. Here are their numbers in some context:
| in millions of €, UOS | Q1/15 | Q2/15 | Q3/15 | Q4/15 | Q1/16 |
|---|---|---|---|---|---|
| – Fibre | 5.8 | 6.1 | 6.5 | 6.6 | 6.7 |
| – Wavelengths | 8.2 | 9.0 | 9.2 | 9.7 | 10.1 |
| – Ethernet | 5.3 | 5.4 | 5.5 | 5.5 | 5.5 |
| – Non-focus | 6.2 | 6.1 | 6.0 | 6.0 | 5.9 |
| – Energy, Amortised, Other | 2.2 | 2.6 | 2.5 | 2.7 | 2.4 |
| Total Revenue | 27.8 | 29.2 | 29.6 | 30.6 | 30.6 |
| Gross margin | 77.5% | 77.2% | 77.6% | 77.6% | 78.0% |
| Adj EBITDA | 7.6 | 8.2 | 8.2 | 9.9 | 9.8 |
| Adj EBITDA margin | 27.3% | 28.1% | 27.7% | 32.3% | 32.0% |
| Capital Expenditures | 9.2 | 9.8 | 11.3 | 10.9 | 11.5 |
| Proxy Cash Flow | (1.6) | (1.6) | (3.1) | (1.0) | (1.7) |
| New Sales (in thousands of €) | 789 | 796 | 898 | 819 | 970 |
| Installs (in thousands of €) | 585 | 774 | 699 | 655 | 706 |
| Monthly Incremental Service Revenue | 209 | 240 | 166 | 197 | 381 |
| Churn | 1.0% | 1.1% | 1.3% | 0.9% | 0.7% |
Continued steady sequential growth in fiber and wavelength products was offset this quarter by lower energy and non-focus revenues. But new sales hit a new high while churn fell to a new low, suggesting the trend for 2016 will continue to be upward. EBITDA margins remained above 30% after last quarter’s surge, suggesting this is indeed the new level to look for.
euNetworks has been investing heavily in its infrastructure lately, and during Q1 announced longhaul expansions both south to Marseille and north to Stockholm. That spending certainly shows up in the numbers, as capex hit a new high of 11.5M, or 37.6% of revenue. Proxy Cash Flow stayed in its usual range at -1.7M as the company pours all its gains back into future organic growth potential, and then some.
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Categories: Financials · Metro fiber
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