TBS Group expects growth to slow down in 2022

Telelink Business Services Group

Telelink Business Services Group

Telelink Business Services Group’s (TBS Group) FY2022 top line is expected to grow 13% y/y to BGN 186m, according to the Group’s Spring 2022 strategic guidance for the 2022-2026 period. The latter is 3% lower than the autumn 2021 guidance. Gross profit margin is expected to remain relatively unchanged y/y at 17.7% (vs 19.37% previously forecasted) due to inflationary pressure while additional cost pressure is expected to push net profit margin to 5.6% (1.6 pp lower than autumn estimates). Accordingly, FY22 net profit is expected to decrease 15% y/y to BGN 10.5m.

TBS Group plans to invest 1.5x more in FY22 focusing mainly on new markets, mostly Croatia and Romania, as well as operational and talent improvement. All major segments are expected to expand during the year with the largest growth coming from Enterprise Connectivity (up 120% y/y), followed by Private Cloud (up 20% y/y). Geographically-wise, domestic market will rise the most – by 14% y/y, followed by Mid-Western Balkans region with 12% y/y.

Long term plans

In the longer term, management expects the Company to catch up and to even exceed its previous growth forecast. Revenue is envisioned at BGN 309.2m in 2025 (5% higher than previous forecasts), indicating 5Y CAGR of 18%. Profitability on the other hand will face difficulties to recover to previous estimations. EBITDA is forecasted at BGN 38m in 2025 (vs BGN 41m previously) with a margin of 12.2%, adding 1.8 pp compared to FY21. Net profits are expected to reach BGN 27m in 2025, which is BGN 2m lower than Autumn’s guidance update. Net profit margin will add 1.4 pp over the next 4 years to reach 8.8% in FY25.

For more details watch the full video of the digital event: TBS Group – Financial Outlook and Strategic Highlights 2022-2026

Develiot joins TBS Group

Meanwhile, the Company announced that the tech startup Develiot is joining TBS Group as part of newly established IoT Solutions Department via employees transfer. Develiot used to be part of Telelink Group before it was divested to function as sole vendor. Now it will partner again with TBS Group to further expand Group’s services portfolio and help it become a major player in the IoT market by focusing on delivering both tailor-made IoT solutions and standardized end-to-end IoT solutions at scale.

Develiot is a Bulgarian growing company that develops IoT autonomous industrial-grade sensors in the field of urban water supply and urban air quality. It provides scalable end-to-end solutions, encompassing optimal data sensing, optimal data transmission, optimal data visualization and analytics, and effortless third-party integrations. Company’s business model is entirely B2B based and typical partners are System Integrators, Telecoms, Value-Added Distributors, and Consulting companies, such as A1, Vivacom, Meshed and Telelink themselves. The company is 99.81% owned by Lyubomir Minchev’s Telelink Investments. Please note that mr. Minchev is also the majority holder of TBS Group.

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