United Group (UG), the leading multi-play telecommunications and media company in Southeastern Europe, has achieved record financial results for the financial year 2023. The group delivered 7% growth in both revenues and EBITDAal to €2,791 million and €988 million respectively. Adjusting for the impact of the sale of the group’s tower portfolio in August 2023, the group delivered 10% like-for-like organic EBITDAal growth in 2023, it announced yesterday.

Overall, all business units delivered strong organic revenue growth. Performance particularly benefitted from: 1) the continued expansion of the mobile post-paid subscriber base across the group’s key markets; 2) strong demand for B2B IT solutions and equipment, particularly in Greece; and 3) growth in United Media supported by increasing advertising and media sales. EBITDAal benefitted from both those same drivers supporting strong revenue growth and proactive cost management that allowed the group to maintain EBITDAal margins at 35%, despite inflationary pressure.

“2023 was really a year of strategic integrations of our acquisitions in Greece, Bulgaria, and Croatia, with all the major initiatives, included cost synergies, completed by the year end. Additionally, our further investments in fiber and 5G technology, as well as pivotal spectrum acquisitions, contributed to our solidified position across all major markets”, said Victoriya Boklag, CEO of the United Group. “In a challenging environment, we continued to drive strong growth by consistently pursuing our strategy of providing superior products and services on modern and robust infrastructure.”

Integrated business model as a key differentiator

United Group has consistently delivered growth over the long-term. As the leading multi-play telecoms and media company in Southeastern Europe, United Group provides its markets with the largest broadband network, state-of-the-art fixed and mobile connectivity, TV content production, broadcasting and streaming of major sports and entertainment formats and many of the most trusted news portals in these markets. In 2023, more than 5.30 million households relied on United Group’s broadband and telecom services, while its mobile services reached over 7.34 million subscribers. The company’s commitment to cross-selling value-added multi-play packages, including fixed-mobile convergence, is a key driver of this continued success. Additionally, United Media reaches 8.2 million households through its channels, while the in-house content production team creates compelling content for their Pay-TV channels, historically boosting Pay-TV subscriptions. United Media currently produces close to 50% of the total content in its TV portfolio, including FTA (terrestrial) and Pay-TV operations other than sports channels, and its main prime-time programs typically receive ratings of between 25% and 40% share in the main markets where its Media segment operates.

Proven track record on acquisitions

United Group has successfully completed close to 150 accretive acquisitions since 2000, of which five in 2023. As a major milestone, in February 2024 United Group successfully closed the acquisition of Bulsatcom EOOD, Bulgaria’s 3 fixed telecom services provider. This strategic acquisition will allow the company to broaden the perimeter of addressable households in Bulgaria and bring United Group’s in-demand products and services to Bulsatcom’s customers.

Unlocking potential for further growth

United Group saw a material improvement in operating cash flow over 2023, driven by both the growth in EBITDAal and a reduction in CAPEX (from 27% of revenue in 2022 to 23% in 2023, driven in part by a decline of capitalized inventories accumulated in anticipation of supply chain disruptions during COVID years). Critically, in 2023, United Group took advantage of strong demand for telecommunications towers infrastructure, to sell its non-core tower portfolio for proceeds of €1.2 billion. These proceeds were used to significantly de-lever the business, in-turn freeing up cash flow for future growth. As at December 31, 2023, net leverage (ratio of Group Net Debt to Annualised Last Two Quarters Adjusted EBITDAal) decreased to 4.20x, compared to 4.96x as at December 31, 2022. Rating Agencies confirmed United Group’s credit rating of B2 (stable) / B (positive) (Moody’s / S&P).

Major milestones in 2024

In 2023, United Group made significant strides, positioning itself for continued success in the first quarter of 2024. Its efforts paid off as it secured the position of the second largest mobile operator in Slovenia. This achievement reflects the company’s commitment to expanding its footprint in the region. United Group’s investment in fiber-to-the-home (FTTH) infrastructure propelled it to become the second largest FTTH network provider in Greece underscoring the company’s ambition to delivering high-speed internet connectivity to Greek households. And the strategic move to acquire Bulsatcom already solidified its position as the biggest operator in Bulgaria. By integrating Bulsatcom’s operations, United Group aims to enhance its services and reach a wider customer base.