COMHSS (NORCELL SWEDEN HOLDING 3) in SEK
– a BB- trading like a B+
•
Norcell Sweden Holding 3 (Com
Hem) has issued one senior secured
SEK bond rated BB-/Ba3.
Ola Heldal
+47 85 40 84 33
olh@danskebank.com
Gabriel Bergin
+46 8 568 80602
gabe@danskebank.com
500
450
400
•
•
•
Compared to other rated and
unrated issues in the SEK universe,
COMHSS looks cheap and trades in
line with or somewhat wider than
names in the B+ area.
350
Note also that COMHSS ‘19 has
official issue ratings from S&P and
Moody’s.
150
See next page for our updated view
and forecast on Com Hem.
Important certifications and disclosures are contained from page 4
300
250
200
100
50
0
2014/072015/072016/072017/072018/072019/072020/07
Cloetta Ab
Hemfosa Fastighe
Norcell Sweden
Fastpartner Ab
Klovern Ab
Opus Group Ab
Source: Bloomberg, Danske Bank Markets
Heimstaden
Meda Ab
Ssab Ab
1
Com Hem Overview
• Leading Swedish cable operator providing pay TV, broadband
and fixed telephony.
SEKm
•Com Hem delivered
organic top line growth of 9.6% (3.7%
organic) in addition to strong KPIs in particular in broadband in
Q3 14.
•TiVo uptake is now at 132k subs, which represents 21.7% of
Pay TV RGUs.
• Net adds were strong in Q3 14 with +17k subs in broadband,
8k subs in Pay TV and 3k in Fixed Telephony.
•Consumer ARPU was stable
Cash Flow
m/m at SEK361.
• Net leverage at 3.9x LTM EBITDA as of Q3 14, with Net
leverage through the secured part of the capital structure of
3.1x LTM EBITDA.
Strengths
• Stable top line and margins with diverse customer base.
• Strong market position in footprint.
• High barriers to entry with ‘up-selling potential’.
•State-of-the-art network.
Weaknesses
• Competition from other networks and OTT (HBO Nordic etc.).
• Scale; Com Hem is smaller than European peers.
• Private Equity Majority ownership (BC Partners 47.8%).
• Com Hem leases some of its backbone and other
infrastructure.
Revenue
% change y/y
Gross Profit
Margin %
2012
2013 Q1 14 Q2 14 Q3 14 Q4 14E
4.562 4.448 1.124 1.198 1.210
0,9% -2,5% 0,1% 8,1% 9,6%
2014E
2015E 2016E
1.209
8,6%
4.741
6,6%
4.948
4,4%
5.111
3,3%
867
864
3.389
3.513
3.647
72,28% 72,1% 71,9% 70,9% 71,6%
71,5%
3.297
3.207
808
2.232 2.200
576
574
2.260
2.325
Margin %
48,9% 49,5% 48,5% 47,2% 47,6%
47,5%
47,7%
47,0% 47,4%
Cash Taxes
Non recurring items
FFO
Change in WC
Operating Cash Flow
Capex
% Capex/Sales
FCF, before M&A
566
71,5% 71,00% 71,4%
EBITDA Underlying
Cash Interest paid
545
850
2.420
-968
-977
-97
-522
-12
-426
-1.057
-479
-417
0
0
0
0
0
0
0
0
0
-49
-173
-54
-144
-9
-35
-242
-140
0
1.214 1.051
2.004
394
-100
555
113
962
1.706
-15
-73
31
-68
73
-37
31
0
1.098 1.035
321
-69
487
186
925
1.737
2.004
-913 -1.038
-215
-239
-257
-262
-973
-1.024 -1.022
20,0% 23,3% 19,1% 20,0% 21,3%
21,7%
20,5%
20,7% 20,0%
-76
-49
-116
185
-3
106
-308
230
713
981
Aquisitions net
0
-8
-291
-11
0
0
-302
0
0
Financing costs
-37
-16
0
-51
-488
-50
-589
-25
0
New debt
2.120
800
0
4.800
0
3.775
8.575
2.000
0
Repayment of debt
-147 -6.252 -4.047
-2.527
-354
New shares/ div
415
0
Change in cash
-383
460
-3.492
-13.938
-1.713
0
567
0
6.239
-160
-750
-333 3.852 -3.732
297
84
823
230
0
5.672
Source: Company data, Danske Bank Markets
2
Fixed Income Credit Research team
Thomas Hovard, Chief Analyst
Head of Credit Research
+45 45 12 85 05
hova@danskebank.com
Brian Børsting, Senior Analyst
Industrials
+45 45 12 85 19
brbr@danskebank.com
Ola Heldal, Analyst
TMT
+47 85 40 84 33
olh@danskebank.com
Louis Landeman, Analyst
TMT, Industrials
+46 8 568 80524
llan@danskebank.com
Lars Holm, Senior Analyst
Financials
+45 45 12 80 41
laho@danskebank.dk
Sondre Dale Stormyr, Analyst
Offshore Rigs
+47 85 40 70 70
sost@danskebank.com
Mads Rosendal, Analyst
Industrials, Pulp & Paper
+45 45 14 88 79
madro@danskebank.com
Gabriel Bergin, Analyst
Strategy, Industrials
+46 8 568 80602
gabe@danskebank.com
Henrik René Andresen, Analyst
Credit Portfolios
+45 45 13 33 27
hena@danskebank.com
Jakob Magnussen, Senior Analyst
Utilities, Energy
+45 45 12 85 03
jakja@danskebank.com
Niklas Ripa, Senior Analyst
High Yield, Industrials
+45 45 12 80 47
niri@danskebank.com
Øyvind Mossige, Senior Analyst
Oil sSrvices
+47 85 40 54 91
omss@danskebank.com
Knut-Ivar Bakken, Analyst
Fish Farming
+47 85 40 70 74
knb@danskebank.com
Bjørn Kristian Røed,, Analyst
Shipping
+47 85 40 70 72
bred@danskebank.com
3
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4
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6