Morgan Stanley | The figures are not available in all areas but we estimate that the telecos’ exposure to the spike in energy costs for the marjority of the stocks is around 1-2% of sales (on average).
To give a more complete view, using as a reference the margins and Capex, for an operator with an EBITDA margin of 38% and Capex of 19%, a cost of energy x2 would mean an impact of 3-5% on EBITDA and of 5-11% on Operating Cash Flows (opFCF). Meanwhile, if the cost tripled, then the impact would be 5-11% on EBITDA and 11-12% on opFCF.
In the specific case of Telefónica (TEF), with an EBITDA margin and operating margin in 2021 of 33% and 19% respectively, and revenues’ exposure of 2%, if energy costs were to double, the effect would be significant: -6% on EBITDA margin and -11% on the opFCF margin. To offset this rise, we believe a 3% increase in revenues would be required.
