Telelink’s (TBS Group – TBS BU) top line growth pace slows down, bottom line outperforms in 9M’20. Telelink Business Services Group’s (TBS Group), the leading system integrated in Bulgaria, strong financial performance persisted over the 9M’2020.
The top line climbed 21% y/y to BGN 94.3m for the period with a slight drop of 5.5% y/y in Q3’20 alone. Revenue expanded across all regions. The domestic market, the largest in share of total sales, grew by 16% y/y to BGN 51.04m, followed by Midwestern Balkans which rebounded from slower 2019 and added 13% y/y to BGN 35.01m in 9M’20. The two markets lost some relative share of the group’s total revenue to recently entered Southwestern Balkans gained momentum, contributing BGN 2.8m in sales, and Central and Western Europe markets grew 64% y/y to BGN 4.3m.
On product level, TBSG’s revenue was driven by a boost in Networking and Productivity segments with 26% and 59% y/y, respectively, to 57.6m and BGN 17m in 9m’20. Most significant drivers were the advance in Telecom and, Modern Workplace solutions which added 36% y/y up and the 59% y/y, respectively. In contrast, the Data Center segment observed an 8% y/y decline to BGN 15.6m due to a one-off drop in Programming services solutions. Information security solutions remained stable at BGN 3.16m for the period.
While the Group’s top line expansion slowed down in Q3’20 after a very strong start of the year, the bottom line fortified its excellent performance. EBIT surged 63.4% y/y to BGN 11.9m in 9M’20, EBITDA advanced 60% y/y to BGN 13.5m while net income added 69% y/y to BGN 10m as growing higher value added solutions weighted in. Respective top line margins stood at 13%, 14% and 11% as of the end of September 2020.
For the three month period between June and September 2020, the Group’s performance showed moderate fluctuations in the Data Centre and Productivity segments. After exceptionally strong H1’20, both segments slowed down as the former declined by 40% y/y to BGN 5.4m in Q3’20 alone, while the latter sank by 50% y/y to BGN 3.2m for the period. The Networking segment remained the largest source of revenue (62% for Q3’20) at BGN 18.5m, up 28% y/y, driven mostly by increase in Corporate Network services. The strongest gain was marked by the Information security segment that doubled in value compared to Q3’19 pushing BGN 1.65m. All in all, sales in Q3’20 alone declined 5.5% to BGN 29.2m. Yet, profitability improved as EBIT climbed 12.9% y/y to BGN 4.2m, advancing its margin by 230 bps y/y to 14.2%. Net income rose 15.2% y/y to BGN 3.6m.
Presentation of 9M’20 at a digital event – 8th December 2020
The Company will discuss its 9M’2020 performance at its regular digital review that will be held on Dec. 8th, 2020. There will be a session in Bulgarian, followed by a session in English with interested investors able to register for the event at at Telelink’s corporate website.