Magyar Telekom Telecommunications Plc · BET:MTELEKOM
Magyar Telekom Telecommunications — Magyar Telekom — 9M 2010 Earnings Presentation
26 slides from Magyar Telekom Telecommunications's earnings presentation, 2010
Slide 1: Magyar Telekom first nine months 2010 results
Presentation Magyar Telekom first nine months 2010 results Solid performance driven by successful strategic initiatives
Slide 2: Overview – Magyar Telekom Group at a glance
Overview – Magyar Telekom Group at a glance International presence Integrated operations in Hungary, Macedonia and Montenegro leading telecommunications service provider in all three Ukraine countries leading SI/IT service provider in Hungary Moldova Hungary Slovenia Croatia Croatia Romania BiH
Slide 3: Change in organizational structure
Change in organizational structure New organizational structure – effective from July 1, 2010 CEO Finance Technology Human Strategy & Business Sales & Service Marketing Legal & R Resources B i Business S i Services C Corporate Development Affairs Rationale: improved effectiveness in responding to
Slide 4: Hungarian market – infrastructure based-competition
Hungarian market – infrastructure based-competition Wireline voice traffic trends Mobile subscriber trends 100% Penetration 118% 118% 119% 119% 118% 7% 7% 7% 7% 6% 100% 11% 14% 18% 80% 20% 23% 80% 58% 57% 56% 55% 54% 60% 60% 40% 83% 78% 75% 73% 71% 40% 20% 42% 43% 44% % 45% 46% 20% 0% 0% Q2 2009 Q3
Slide 5: Strong positions in all segments of the Hungarian market
Strong positions in all segments of the Hungarian market TV market shares Mobile voice market shares* 100% 100% 13% 13% 14% 12% 12% 6% 6% 5% 5% 21% 22% 22% 22% 22% 80% 5% 80% 24% 23% 23% 24% 25% 60% 60% 34% 33% 34% 34% 33% 40% 33% 32% 32% 31% 30% 40% 20% 20% 45% 45% 44% 44% 45% 24% 26% 27% 28% 28% 0
Slide 6: 3Play as growth engine & retention tool in the residential segment
3Play as growth engine & retention tool in the residential segment Fi d voice Fixed i access Strong focus on triple play on all networks (fixed line, line Subscribers cable and mobile) -9% 1 800 000 +18% 1 600 000 +14% new packages include improved VoIP solutions triple play offers start from HU
Slide 7: Regulatory snapshot
Regulatory snapshot Regulation in line with EU recommendations in all three countries Hungary: fully in line with the EU Regulatory Framework Macedonia: liberalization of fixed line market in progress, regulated mobile termination rates Montenegro: new telecommunication law adopted in 2008 – f
Slide 8: Magyar Telekom's major challenges
Magyar Telekom’s major challenges Change in revenue mix 2009 CAPEX breakdown 100% SI/IT: 1% New revenue / >10% SI/IT 11% 80% sources New 20% < 20% revenue sources 60% > 30% Voice 31% 40% revenues > 70% Voice 38% revenues 20% < 50% 0% International Maintenance and BAU 2005 2009 2012 New revenue sourc
Slide 9: Changing trends require continued efficiency improvements
Changing trends require continued efficiency improvements U d l i TWM expense iin H Underlying Hungary HUF billion 135 121 115 114 106 90 45 0 2008 2009 2010 2011 Employee-related Other workforce Headcount reduction in 2010 Headcount reduction in 2011 400+ employee redundancies at the parent compa
Slide 10: Some improvement in the economic environment
Some improvement in the economic environment G Group revenues and d Hungarian H i GDP Economic indicators influence f telecommunication 2% spending in different ways 0% in 2009 all components of economic activity suffered a meaningful decline in Hungary -2% telecommunication spending lags GDP tr
Slide 11: Dividend policy
Dividend policy Historical dividend payments Usage of free cash flow Net debt ratio* DPS (HUF) % of the generated free cash 50% 73 74 74 74 80 70 70 125% 6% 36% 38% 40% 100% 1% 33.2% Target 60 16% 31.7% 31.0% 29.7% 30.8% 17% 30% 13% 1% 1% 75% 40 14% 20% 50% 91% 74% 78% 79% 20 59% 10% 25% 0% 0 0% 200
Slide 12: Performance against public targets for 2010
Performance against public targets for 2010 2010 public targets 2010 9M results Revenue 66-8% 8% decline (prev (prev. 5-7% 5 7% ) 5 8% decline 5.8% decreasing consumer spending recessionary impacts rationalization in the business sector intense competition stronger forint compared to avera
Slide 13: 9M 2010 results – Business Unit analysis
9M 2010 results – Business Unit analysis Revenue development Underlying EBITDA development HUF million HUF million 55.8% 8% revenue decline d li driven d i bby economici 77.5% 5% underlying d l i EBITDA decline d li driven d i by b recession, competition and regulation changing revenue mix and econo
Slide 14: Consumer Services Business Unit (CBU) - Financials
Consumer Services Business Unit (CBU) - Financials Fi d liline revenues Fixed M bil revenues Mobile HUF million 99,757 -5% 94,380 HUF million 140,744 -1% 139,592 100 000 160 000 +16% 80 000 +12% +17% 120 000 -1% +10% 60 000 80 000 40 000 -4% -14% 40 000 20 000 0 0 9M 2009 9M 2010 9M 2009 9M 2010 Voi
Slide 15: CBU – mobile operations
CBU – mobile operations ARPU MOU Mobile internet development HUF min leading market position with 49% market share 4 000 160 number of T-Mobile’s subscribers exceeded 3 141 3 223 124 137 3 000 +3% 120 +11% 545,000 at the end of Q3 2010 2 000 3G/HSDPA network covering ~75% of population 80 1 00
Slide 16: CBU KPIs
CBU KPIs Fixed Fixed & mobile broadband Voice ARPA Broadband ARPU Customer growth Subscribers +25% HUF HUF 1 000 000 4 500 6 000 3 623 3 434 4 496 3 983 750 000 +59% -5% -11% 3 000 4 000 +19% 500 000 1 500 2 000 250 000 +6% 0 0 0 9M 2009 9M 2010 9M 2009 9M 2010 September 2009 September 2010 ADSL Cab
Slide 17: Business Services Business Unit (BBU) - Financials
Business Services Business Unit (BBU) - Financials Revenues Falling voice and data revenues HUF million -6% strong pressure on clients to renegotiate contract terms 150 000 123,498 116,544 high churn among fixed voice, data and internet customers 120 000 continued ti d pressure on mobilebil tt
Slide 18: BBU KPIs
BBU KPIs Fixed voice access DSL connections Subscribers Subscribers 383,453 -13% 332,328 202,385 -17% 168,932 420 000 240 000 180 000 280 000 -13% -19% 120 000 140 000 -29% 60 000 -13% -6% 0 0 September 2009 September 2010 September 2009 September 2010 B i Business lines li M Managedd leased l d lin
Slide 19: Macedonia - Financials
Macedonia - Financials R Revenues R lt negatively Results ti l iimpacted t d bby FX trend t d HUF million -7% HUF strengthened on average by 3% to the Macedonian 80 000 63,327 Denar in 9M 2010 58,770 excluding FX impact revenues were down by 4% and EBITDA 60 000 -14% 14% was down by 9% 40 000 -5
Slide 20: Montenegro - Financials
Montenegro - Financials Revenues HUF million -6% Results negatively impacted by FX trend 30 000 26,400 24,768 HUF strengthened on average by 2.6% to the Euro in 9M 2010 -8% excluding FX impact, revenues were down by 4% but 20 000 underlying d l i EBITDA increased i d by b 4% -8% 10 000 +7% Fixed
Slide 21: International KPIs Macedonia Montenegro
International KPIs Macedonia Fixed voice access ADSL/IPTV customer growth Mobile subscribers Subscribers Subscribers Penetration 19.0% Penetration 17.5% 67% 81% 111% 116% 120% S b ib Subscribers 200 000 2 500 000 400 000 +182% 23 445 12% 16% 18% 150 000 2 000 000 8,301 8% 300 000 29% 28% 29% -9% 1 5
Slide 22: Magyar Telekom - Consolidated Income Statement
Magyar Telekom - Consolidated Income Statement HUF million Jan-Sep Jan Sep 2009 Jan-Sep Jan Sep 2010 Change Fixed line revenues 207 140 186 126 -10,1% Mobile revenues 243 068 234 096 -3,7% y System Integration/Information g / Technology gy revenues 30 406 32 380 6,5% , Revenues 480 614 452 602 -5,8%
Slide 23: Magyar Telekom - Consolidated Balance Sheet
Magyar Telekom - Consolidated Balance Sheet HUF million 31 Dec 2009 30 Sep 2010 Change Current assets 249 366 192 215 -22,9% Cash and cash equivalents 34 270 18 051 -47,3% Other current financial assets 87 611 49 437 , -43,6% Non current assets 917 011 898 348 -2,0% Property, plant and equipment - n
Slide 24: Magyar Telekom - Consolidated Cashflow Statement
Magyar Telekom - Consolidated Cashflow Statement HUF million Jan-Sep Jan Sep 2009 Jan-Sep Jan Sep 2010 Change Net cash generated from operating activities 147 714 148 185 0,3% Investments in tangible and intangible assets (71 544) (54 303) -24,1% Adjustments j to cash ppurchases ((11 616)) ((4 177))
Slide 25: Abbreviations
Abbreviations: 3G: third generation, ARPU: average revenue per user, BB: broadband, CBC: call-by-call, CPS: carrier pre-selection, HQ: headquarters, HSDPA: high-speed downlink packet access, IC: interconnection, IP: internet protocol, IT: information technology, LTO: local telecommunication operator
Slide 26: For further questions please contact the IR department
For further questions please contact the IR department: Investor Relations Phone: +36 1 458-0423 Fax: +36 1 458-0443 e-mail: investor.relations@telekom.hu In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-GAAP financial performance measures, including, among o