The Euskaltel Group's General Shareholders' Meeting approves the annual accounts and backs the management of the company
Derio, 1 April 2019. The Euskaltel Group's shareholders have approved last years' annual accounts, directors? report and other proposals included on the agenda at the General Shareholders' Meeting held this morning at its headquarters in Derio (Bizkaia) by a large majority -with over 92% of the vote.
The General Meeting has also approved the proposed distribution of profit for the Euskaltel Group and the dividend distribution for the year ended 31 December 2018. The final dividend to be distributed to shareholders after today's approval at the Annual General Meeting, is Euros 0.31 per share, which is equivalent to a return of 4.2% over the weighted average share price in 2018 and 11.5% more than the prior year.
It is important to note that Euskaltel?s Board of Directors agreed in October 2018 to pay an interim dividend to the Company?s shareholders against 2018 profits for a gross amount of Euros 0.14 per share outstanding with dividend rights, which was paid out on 7 February 2019.
Subsequently, the Board of Directors agreed to submit to the General Shareholders Meeting the approval of a complementary dividend of Euros 0.17 per share, which will be paid out on the date agreed at the meeting of the Board of Directors to be held on a date yet to be determined.
This is the third consecutive year that a dividend has been paid out since the company was floated on the stock exchange in July 2015. Furthermore, this dividend distribution demonstrates the Group's commitment to its shareholders and reinforces the objective to add value to investors.
In his speech to shareholders, the chairman of the Euskaltel Group, Alberto García Erauzkin, highlighted that all the proposals presented at the General Meeting have been approved, firmly supporting the company's management and strategy "All the achievements met and challenges taken on are attributable to a committed team and the trust shown by our shareholders and investors. As a result, we can build customer loyalty that helps us to keep growing. Each person that places their trust in us forms part of the Euskaltel Group?s success. Thanks to their support, we have become a leading telecom operator in our markets. We are committed to continuing to grow together, considering each region?s needs and providing an excellent service".
Alberto García Erauzkin expressly acknowledged "each and every one of the individuals whose commitment, work and success has contributed and continues to contribute every day to the greatness of this project. A project that is both exciting and challenging in equal measure and which, through ongoing growth, will bolster the Euskaltel Group?s strength and stability".
Alberto García Erauzkin underlined the milestones that have defined the Euskaltel Group?s evolution in the market during 2018. "2018 saw huge progress in the Euskaltel Group?s overall integration and efficiency improvements while protecting our special features in each region and the emotional bonds to all of our brands; Euskaltel in the Basque Country, R in Galicia and Telecable in Asturias. In parallel, we have also commenced our expansion plan in Navarre, León, La Rioja, Cantabria and Catalonia. Moving into new markets, whilst strengthening our presence in traditional markets, will allow us to continue increasing our income and our customer base, fulfilling the commitments made to our stakeholders".
The General Shareholders' Meeting has approved the Euskaltel Group's annual accounts, marking one more step in its evolution as a leading convergent operator in the north of Spain and successfully kicking off its geographical expansion plan in five new markets -Navarre, Cantabria, León, La Rioja and Catalonia-.
The Group closed 2018 with revenues of Euros 692 million, which is 11.2% above the prior year. The Group's net profit recorded growth of 26.6%, reaching a record figure of almost Euros 63 million. The Group?s EBITDA came to Euros 336.4 million, which is 9.6% up on the previous year, with an EBITDA margin of 48.6%, up 42 basis points in one year.
Despite the expected increase in expenses relating to the Group's expansion and integration plans, in 2018 the Company boosted its capacity to generate free cash flow by 24%, reaching Euros 124 million during the year, which reflects almost 18% of revenues. These figures place the Euskaltel Group in the top 3 companies in Europe?s telecommunications sector in terms of EBITDA margin and cash flow generation. Furthermore, the Group continues to reduce its debt, with a debt ratio of less than 4.5 times EBITDA.
In his speech at the General Shareholders' Meeting, the Group's CEO, Francisco Arteche, stressed "our company?s excellent prospects. In 2018 we have started laying the groundwork to be not only the leading operator in northern Spain, but also one of the main operators with nationwide coverage. 2018 has also been a year of transformation. Thanks to the business strategy (2018-2022) we have created, we are moving forward with solid steps and we are ready to face the challenges of the sector with great potential and future growth. This strategy -remarked Arteche- is our starting point, in line with the strengths that have made us an operator and ally worthy of our customers? utmost trust, in line with our growth plan since our flotation 3 years ago and in line with our values and a business model that works, provides guarantees and shows excellent financial soundness".
Francisco Arteche revisited the five mainstays upon which the company's medium and long-term growth and competitiveness are based.
Firstly, the Group is in the midst of its geographical expansion plan, which will be undertaken throughout 2019 across five new markets -Navarre, Cantabria, León and La Rioja- due to geographical proximity, as well as Catalonia, where, thanks to the strategic alliances established by the Group, it markets its products and services under the RACCtel+ brand, having reached an agreement with the insurance company RACC. The company hopes to reach over one million new homes this year, forecasting that the new markets will jointly provide 8% of the Group?s revenues in 2022. This plan, together with the agreement between the Euskaltel Group and Orange, gives the operator potential access to 10 million new homes in Spain.
Secondly, the company has a simplification, transformation and digitalisation plan which will improve its products and secure enhanced digitalisation and user-friendliness. These enhanced efficiencies are expected to generate more than Euros 43 million per year in 2022. Among other improvements, during 2018 progress has been made on projects such as developing internal collaboration tools, a single systems platform, a new CRM system and the unification of the apps used by customers.
Thirdly, the operator is working on creating the best user experience, maintaining its leadership in the residential segment, thanks to a convergent offer which places the Group as the benchmark operator in WiFi-based family service solutions, broadband, the TV viewing experience and mobility. The Euskaltel Group has become the most advanced telecommunications operator in Europe in terms of HFC fibre network, one of the first operators to deploy Docsis 3.1 technology across its entire network, ensuring faster, more stable and efficient internet service, complemented by the best WiFi experience in homes, offices and outdoors. Mention should also be made to the fact that the company has carried out over 100,000 WiFi audits in customer homes. The Group has an 80% market share for 4K Android decoders in Spain with high rates of user satisfaction. Also, thanks to its strategy of forming alliances with the main players on the market, the Euskaltel Group was the first to offer world class services with contents such as Netflix and Amazon Prime Video.
Fourthly, the Euskaltel Group has grown again in the B2B sector thanks to a unified sales strategy, its new range of products and services, alliances with the top players on the market and the global scope of its B2B services. Moreover, the Group is reinforcing technologies relating to WiFi and Mobility, AI (artificial intelligence) and IoT (the internet of things), Industry 4.0, apps and new technologies.
Lastly, there is what the Group considers to be its most important mainstay: its people. The Euskaltel Group infuses its human resources management with professional recognition and development, innovation, motivation, commitment and pride in belonging, in order to build the company's corporate reputation and its brands.
Arteche has highlighted that "this cross-organisational culture makes us a benchmark for customer care, commitment and support, without losing sight of opportunities to grow and develop in new businesses and geographic markets".
The Euskaltel Group's CEO announced the company's forecasts for the coming years at the General Shareholders' Meeting. "In short, this plan is our response to the trust placed in us by our shareholders. A business plan taking us to 2022, which forecasts a reduction in net debt to below 3.5x Ebitda. By sticking to this strategy, 2019 will continue along the line of sustainable growth in terms of revenues, profitability and debt reduction. We aim to continue growing in revenues to reach Euros 800 million in turnover in four years, and bringing EBITDA to Euros 400 million by 2022. Growth in operating cash flow will accelerate when the majority of the simplification plan concludes this year. Our goal in 2019 is to keep on gaining traction throughout the year and improve our performance each quarter, as we bring the initiatives we are implementing to fruition".
The Group's chairman, Alberto García Erauzkin, has described the different initiatives set up in the area of Corporate Governance to the General Shareholders' Meeting. Based on the corporate values defined by the Group -proximity, honesty, innovation and efficiency-, Euskaltel continues to grow and develop a corporate culture geared towards generating value, "responding in a comprehensive manner to the communication needs of people and helping businesses be more productive, contributing to the economic and social development of the regions where we carry out our activity".
The Euskaltel Group is a benchmark in implementing business models and undertaking measures to ensure good governance in its organisation. "We roll out our activity developing a corporate culture and applying all the recommendations established in the Good Corporate Governance standards, complying with the Code of Good Governance for Listed Companies issued by the CNMV".
The Euskaltel Group bases its Corporate Governance system on the commitment undertaken with best corporate governance practices, business ethics and social responsibility in all areas of activity. In the last year, the Group hit a series of milestones, such as implementing a unified compliance model, taking another step in its commitment to promote an ethical and responsible culture within the organisation, and successfully adopting the General Data Protection Regulation (GDPR).
2018 was a particularly important year in terms of Corporate Governance, with the completion of the Corporate Social Responsibility Master Plan, having implemented all the proposed actions. Currently, the Group is working on developing a new CSR Plan focused on contributing to the Sustainable Development Goals with actions geared towards promoting the creation of economic, social and environmental value.
"One of the main aims of the new 2019-2022 CSR Plan will therefore be to establish the foundations of Corporate Social Responsibility management in relation to our contribution to the Sustainable Development Goals, aligning the strategic lines to be followed with the corresponding SDGs. In this way, we will be able to quantify our contribution to the major economic, social and environmental challenges humanity is facing".
The Euskaltel Group is also committed to the local Agenda 2030 for the Basque Country, Galicia and Asturias, and to developing and implementing solutions and technologies that will help us face major world challenges in terms of sustainable development.
In recent years, the Group has developed a profound understanding of the SDGs, conveying them to the team through internal campaigns and building them into the company?s corporate culture. The spotlight has been on the priority SDGs, i.e. SDG 8 "Decent work and economic growth" and SDG 9 "Industry, innovation and infrastructure", two goals that are completely aligned with the Group's activity; and also SDG 17 "Partnerships for the goals", which translates into over 150 collaborations promoting the development of tech start-ups and local entrepreneurial talent.
"From senior management, we have taken the SDGs on board and promoted their integration into the strategy in order to align them fully with the company?s goals. At the same time, these goals proposed by the United Nations represent an opportunity to identify future business areas", remarked García Erauzkin.
The Euskaltel Group remains committed to excellence in environmental management as evidenced by its commitment to fighting against climate change, contributing towards the Sustainable Development Goals of "Responsible consumption and production" and "Climate action". By developing these initiatives, we strengthen the Group?s culture and align our business with best market practices.
With this objective, the Group has continued to develop its Environmental Master Plan in 2018, as evidenced by its commitment to combating climate change and its effects, as well as ensuring an efficient use of resources. This Master Plan establishes the lines targeted at reducing the Group?s carbon footprint, improving environmental management and, thereby contributing to the Agenda 2030 in each of the regions in which the Euskaltel Group is present.
It is important to highlight here the long-term energy supply agreement signed with Iberdrola which entails purchasing electricity generated using renewable assets. This is the first agreement of its kind signed in Spain between an energy supply company and a telecommunications operator.
Furthermore, reflecting the Group's commitment to the environment, for the third consecutive year, this General Shareholders' Meeting has been held with the Basque Government?s "Erronka Garbia" endorsement which certifies that the event was held implementing measures that minimise negative environmental impacts.
Euskaltel - Communication Department
94-4011229
comunicacion@euskaltel.com