TBSG expects 13% YoY growth in 2022 cons sales; forecasts 5-year net profit GAGR of 26% (POSITIVE)

Telelink Business Services Group (TBSG) expects 2022 sales to reach BGN 186m, representing about 13% YoY growth. Management also expect gross profit margin to remain almost flat YoY at 17.7%. The estimate for net profit (BGN 10.5m), however, is for 15% YoY decrease, due to the cost pressure, which would bring profit margin down to 5.6%. The holding also intend to increase investments in 2022 by over 150% YoY, focusing mainly on developing new markets. All main segments are expected to increase in 2022, where Enterprise Connectivity sales to expand by 120% YoY, followed by Private Cloud with 20% YoY growth. Geographically-wise, Bulgaria will remain a major growth contributor, since domestic sales are forecasted to rise by 14% YoY, following by MWB (Mid-Western Balkans) region with 12% YoY growth. According to management’s projections, revenue is expected to reach BGN 368m in 2026, indicating CAGR of 17% for 2021-2026 period. EBITDA is forecasted at BGN 56m in 2026, which implies 15.2% EBITDA margin (+4.8 p.p. increase compared to 2021). Bottom line is expected to reach BGN 38.5m by 2026, which translates to CAGR of 26%.