March 5th, 2021 | 10:35 CET
Steinhoff, Upco International, ProSiebenSat.1 - Facing a turnaround?
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The native Franconian has more than 20 years of stock exchange experience and a broadly diversified network.
He is passionate about analyzing a wide variety of business models and investigating new trends.
On the pulse of time
Absolutely on trend is cloud-based wireless Company Upco International. The Canadians, who shot up the turnaround at the beginning of last year with a change in management and strategy, are focusing strictly on two separate business segments. The Wholesale Division can be equated with traditional telecommunications wholesaling. By pooling smaller customers, better contract terms can be achieved with international telecommunications providers for cross-border telephone traffic. The Wholesale Telecom segment is coordinated by Upco International but managed operationally by dedicated companies that will be integrated into the Upco Group of Companies over time. Here, the aim is to grow inorganically through new acquisitions. Two purchases have already been made in the past year.
Scaling through linking
Of course, the wholesale area is also intended to acquire new customers who can then use all the apps of the Upco Group. In this way, users are to be converted into paying customers. Paid services are offered in the second division, Digital Services: Voice and data services, digital payments and money transfers. Voice and data services such as Voice over IP and chats will be handled by UpcoNet, while UpcoPay will handle digital payments.
Transaction via blockchain
UpcoPay, which runs on a blockchain-based direct payment method between individuals or people and merchants, is modular and will be highly scaled up before the end of 2021. Thus, it will be possible to load money, process payments, or even transfer foreign exchange without setting up an account or entering sensitive banking information. Later this year, Upco users in Europe should then be able to use UpcoPay to send and receive money easily, securely, and without using a credit or debit card and much more cheaply than competitors such as Western Union or PayPal.
UpcoPay is set to launch across Europe with Finnish partner Enfuce. After the share performed very well last year, the previous high of EUR 0.30 was reached at the beginning of February. Since then, the stock has been correcting and is looking for its bottom at EUR 0.20. In the long term, the Company's strategy is promising but also fraught with risks.
Since 2017, retail giant Steinhoff has been dealing with the effects of the accounting scandal. Sales were incorrectly booked, which meant that significant special write-offs were necessary. In addition, incorrect balance sheets had to be corrected retrospectively. If the public prosecutor's office has its way, three top managers will now have to defend themselves before a German court on suspicion of accounting manipulation worth billions. According to the indictment, the charges relate to balance sheet manipulation through fictitious transactions totaling more than EUR 1.5 billion. In addition, real estate is said to have been overvalued by EUR 820 million. The Oldenburg public prosecutor's office brought charges of misrepresentation in balance sheets.
In total, more than EUR 6 billion are missing from the balance sheet, and the former managers are said to be responsible for the fact that the book profits from the fictitious transactions were included in the balance sheets. Currently, the new management is trying everything to structure the Group, which was worth more than 20 billion at the time. To achieve this, pearls such as "Poco" low-cost furniture stores or the Austrian "Kika" furniture store were sold. An investment in the Steinhoff share is only for hard-core gamblers. All others: Hands off!
ProSiebenSat.1 - Significant drop in sales
In contrast to the first quarter, there is expected to be a significant downturn in sales compared with the same period last year. Management anticipates a mid-single-digit percentage decline in revenues. In addition, advertising revenues are expected to shrink by a low double-digit percentage. On the other hand, for the full year, 2 to 7% revenue growth is expected. Advertising revenues are expected to be between minus 2 and 4%. The disappointing outlook caused disgruntlement among investors, with the share price falling by more than 5% in the meantime. Analysts, on the other hand, were divided. While Barclays described the outlook as weak, Goldman Sachs was satisfied. Overall, the targets were below analysts' expectations.
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