Telekom Austria AG · VIE:TKA

Telekom Austria — A1 Telekom Austria Group — Q3 2021 Earnings Presentation

44 slides from Telekom Austria's earnings presentation, October 2021

  1. Slide 1: Roadshow Presentation: Results for the third quarter 2021

    Roadshow Presentation Results for the third quarter 2021

  2. Slide 2: Cautionary statement

    Cautionary statement 'This presentation contains forward-looking statements. These forward-looking statements are usually accompanied by words such as 'believe', 'intend', 'anticipate', 'plan', 'expect' and similar expressions. Actual events may differ materially from those anticipated in these forw

  3. Slide 3: A1 Telekom Austria Group key facts

    Key Facts A1 Telekom Austria Group key facts Revenues by segment(a) Bulgaria 4.55 BN Austria 57.3% 11.2% 9.3% Croatia Revenues as of year-end 2020 8.8% Belarus 4.5% 1.58 BN Slovenia North Macedonia 6.2% 2.7% Serbia EBITDA by segment(a) EBITDA as of year-end 2020 11.8% Bulgaria 25 M Austria 57.3% 8.8

  4. Slide 4: The leading regional communications player providing convergent telecommunication services

    A1 Telekom Austria Group: The leading regional communications player providing convergent telecommunication services as of June 30, 2021 (in ‘000) Austria Bulgaria Croatia Mobile market position #1 Mobile market position: #1 Mobile market position #2 Mobile subscribers: Mobile subscribers: Mobile su

  5. Slide 5: Shareholder structure

    Ownership structure Shareholder structure Two strong core shareholders Freefloat by nationality as of December 31, 2020 as of December 31, 2020 Rest of World Switzerland Free Float Rest of Europe 1.3% 0.6% Employee 20.58% United Kingdom 1.4% Stocks/Treasury Shares 3.2% 0.8% Unidentified 5.7% Nordics

  6. Slide 6: Reasons to invest

    Equity Story Reasons to invest Strong market positions  Mostly #1 or #2 positions to leverage growth  Strong and reliable business in Austria, growth markets in CEE opportunities from  Successful upselling and data growth monetization digitalization  Strong demand for ICT solutions Top-quartile

  7. Slide 7: Strong growth performance within peer group

    A1 Peer Group Comparison Strong growth performance within peer group Revenues EBITDA AL adj.* growth Net debt/EBITDA* CAGR, 2016-2020 CAGR, 2016-2020 End of 2020** Deutsche Telekom* 3.2% Deutsche Telekom 5.8% OTE 0.5 A1 Group 1.9% Telenor (NOK) 2.9% Proximus 1.3 Telia (SEK) 1.5% A1 Group 2.4% Swissc

  8. Slide 8: Constant further improvement in balance sheet structure

    Balance sheet structure Constant further improvement in balance sheet structure Debt ratio sharply Equity ratio Rating improved reduced significantly increased Reimbursement of hybrid bond Net Debt / EBITDA (pre IFRS 16) Baa1/BBB+ 38.5 34.9 34.0 32.6 31.2 29.2 Baa2/BBB 0.5 26.7 (positive outlook) 0.

  9. Slide 9: Operational and financial highlights for the first nine months and third quarter 2021

    Operational and financial highlights for the first nine months and third quarter 2021 9

  10. Slide 10: Highlights Q3 2021

    Highlights Q3 2021  Group total revenues grew by 5.5%, predominantly driven by service revenues growth in all markets in both the mobile and the fixed-line businesses  Increased mobile contract subscribers base (+6.2%), Internet@home subscriber growth (+5.4%) and stable RGU base (-0.2%)  Solution

  11. Slide 11: Q3 2021: Solid service revenue trends continue to drive EBITDA higher

    Q3 2021: Solid service revenue trends with growth in all markets continue to drive EBITDA higher Group (in EUR million) Q3 2021 Q3 2020 % change Total revenues 1,205.2 1,142.1 5.5% Service revenues 1,012.9 953.8 6.2% EBITDA before restructuring* 501.3 462.5 8.4% CAPEX 190.5 125.0 52.4%  Group total

  12. Slide 12: Austria and CEE markets in Q3 2021

    Austria and CEE markets in Q3 2021 Total revenues Service revenues EBITDA before restructuring (in EUR mn) (in EUR mn) (in EUR mn) +5.5% +6.2% 50.8 1,205.2 39.8 1,012.9 +8.4% 15.4 23.5 1,142.1 953.8 +40.0 21.5 501.3 +51.9 excl. FX excl. FX 14.1 462.5 +21.6 excl. FX Revenues Austria CEE markets Reven

  13. Slide 13: Austria: Continued strong service revenue trends translated into solid EBITDA growth

    Austria: Continued strong service revenue trends translated into solid EBITDA growth, despite increased core OPEX Total revenues Operational data (in EUR mn)  New A1 Internet@Home portfolio launched in September, while the internet market Δ: +2.3% continued to be mainly driven by mobile WiFi router

  14. Slide 14: CEE: Operational service revenue and EBITDA growth in almost all international markets

    CEE: Operational service revenue and EBITDA growth in almost all international markets Highlights CEE Bulgaria: EBITDA  Service revenues increased by 11.9% in Q3 2021 on the back of: (in EUR mn; Q3 21%-change vs. PY)  mobile WiFi routers, roaming  strong solutions & connectivity business and succ

  15. Slide 15: 1-9M 2021: Free cash flow increased by 8.4% yoy

    1-9M 2021: Free cash flow increased by 8.4% yoy (in EUR million) Q3 2021 Q3 2020 % change 1-9 M 2021 1-9 M 2020 % change EBITDA 480.2 441.6 8.7% 1,306.3 1,212.3 7.7% Restructuring charges and cost of labor obligations 23.6 25.0 -5.6% 67.5 68.3 -1.2% Lease paid (principal, interest and prepayments) -

  16. Slide 16: Focus Points

    V / VZ Focus Points V A -

  17. Slide 17: The 'E' of ESG: Dedicated initiatives to reduce A1 Group's CO2 emissions

    The ‘E’ of ESG: Dedicated initiatives to reduce A1 Group’s CO2 emissions with electricity as key lever Targets Challenges TCFD Analysis Net carbon neutral by 2030 Consumption driven by increasing data usage Assessment of climate- Increase energy efficiency by 80% vs 2019 Electricity accounts for 90%

  18. Slide 18: New Internet@Home portfolio in Austria

    New Internet@Home portfolio in Austria: Customer-centric approach based on technology agnostic broadband products New Internet@Home portfolio Key considerations  Reducing complexity of the Internet@Home portfolio with technology agnostic approach Standardized internet portfolio with best technology

  19. Slide 19: Spectrum auction roadmap: 5G spectrum auctions successfully closed

    Spectrum auction roadmap: Main part of 5G spectrum auctions in A1 Group’s footprint successfully closed Austria Bulgaria Croatia Slovenia    700 MHz / 1.4 GHz /  Acquired spectrum 1.5 GHz / 2.1 GHz / 3.5 GHz 2.1 GHz / 2.6 GHz / 3.6 GHz 700 MHz / 3.6 GHz / 26 GHz 2.1 GHz / 3.6 GHz / 26 GHz Timing

  20. Slide 20: Outlook for the full year 2021

    Outlook for the full year 2021 20

  21. Slide 21: Outlook for the full year 2021 raised

    Outlook for the full year 2021 raised July 14 , 2021 October 19, 2021 Consensus 2021 approx. approx. EUR 4,692 mn Total revenues +2-3% +3-4% (+3.1% yoy) approx. approx. CAPEX EUR 811 mn* EUR 800 mn EUR 800 mn *CAPEX consensus excl. spectrum  Ongoing strong operative performance and positive service

  22. Slide 22: Appendix: ESG

    Vv / Vz Appendix 1 7 ESG A’ |

  23. Slide 23: One.Strategy

    One.Strategy “Environmental, Social & Corporate Governance (ESG)” was introduced as Strategy Enabler The A1 Telekom Austria Group aims to foster more efficient, resource- preserving and thus more sustainable ways of working and living. Results for the first nine months and third quarter 2021 23

  24. Slide 24: ESG Strategy – Enabling the potential of digitalization

    ESG Strategy – Enabling the potential of digitalization for climate, people and society Targets – our ambition Climate & Environment - Ambition 2030 E  Reach net carbon neutrality by decreasing the own carbon footprint & switching to energy from renewables1 (CO2-emissions: +3% yoy)  Increase energ

  25. Slide 25: The 'E' of ESG

    The ‚E‘ of ESG CO2-emission 2030  Approx. more than 100 mobile base stations powered by self-generated electricity from Reach net carbon neutrality from own wind or solar power operations by  Phase-out of diesel generators  decreasing the own carbon footprint and  Procurement of 100% of renewabl

  26. Slide 26: The 'S' of ESG

    The ‘S’ of ESG Digital Education 2023  Since 2011 over 228,000 participants within 14,600 workshops (group-wide) To address 100,000 people – specially children and young people – as part of the focus on digital education.  Focus on Digital Education: developing digital skills and the safe usage of

  27. Slide 27: The 'G' of ESG

    The ‘G’ of ESG  Strong tone-from-the-top. Maintain a best-practice and externally  Group wide conducted integrity survey shows still a strong compliance and integrity certified compliance management culture at A1 system to safeguard the A1 Telekom  As part of the Compliance Summer Tour, more than

  28. Slide 28: ESG KPIs

    ESG KPIs 2019 2020 Change Environment CO2-emissions (in t)* 240,909 247,705 3% E Energy efficiency (in Mwh/Terabyte) 0.18 0.14 -22% Mobile phones collected (No.) 64,504 84,880 32% Digital Education** S Participations in media literacy trainings (no.) 35,326 9,239 -74% Number of Workshops 2,217 527 -

  29. Slide 29: ESG Milestones & Goals

    ESG Milestones & Goals Relevant milestones reached ... ... and ambitious goals to achieve Climate targets: Approved Alignment in CO2 Raise share of renewables Science based target reporting process & first Launch in electricity and reduce group-wide CO2 audit ESG Website CO2 emissions Anchor ESG Int

  30. Slide 30: Appendix: Additional information on KPIs and financials

    Appendix 2 Additional information on KPIs and financials 30

  31. Slide 31: A1 Telekom Austria Group: Profit and Loss

    A1 Telekom Austria Group: Profit and Loss (in EUR million) Q3 2021 Q3 2020 % change Service Revenues 1,012.9 953.8 6.2% Equipment Revenues 172.9 168.9 2.4% Other operating income 19.4 19.4 -0.2% Total Revenues 1,205.2 1,142.1 5.5% Cost of Service -335.2 -316.6 -5.9% Cost of Equipment -167.7 -165.6 -

  32. Slide 32: Total revenues & costs and expenses per segment

    A1 Telekom Austria Group: Total revenues & costs and expenses per segment Total Revenues (in EUR million) Q3 2021 Q3 2020 % change Austria 672.5 657.1 2.3% Bulgaria 144.9 127.9 13.3% Croatia 121.5 111.8 8.7% Belarus 108.8 99.0 9.9% Slovenia 54.0 52.7 2.5% Serbia 83.2 73.7 12.9% North Macedonia 35.0

  33. Slide 33: A1 Telekom Austria Group: Workforce development

    A1 Telekom Austria Group: Workforce development FTE (Average Period) Q3 2021 Q3 2020 % change Austria 7,231 7,424 -2.6% International 10,266 10,334 -0.7% Corporate 374 365 2.5% A1 Telekom Austria Group 17,872 18,123 -1.4% FTE (End of Period) Q3 2021 Q3 2020 % change Austria 7,232 7,414 -2.5% Interna

  34. Slide 34: A1 Telekom Austria Group: Net debt

    A1 Telekom Austria Group: Net debt as of September 30, 2021 Net Debt (excl. Leases) (in EUR million) 30 September 2021 31 December 2020 % change Long-term Debt 1,045.9 1,793.7 -41.7% Short-term Borrowings 1,499.3 749.1 100.2% Cash and Cash Equivalents -471.5 -210.9 -123.6% Net Debt (excl. Leases) of

  35. Slide 35: Financial debt maturity profile

    A1 Telekom Austria Group: Financial debt maturity profile as of September 30, 2021 (in EUR mn) 749.9 749.4 746.3 299.6 0.0 0.0 0.0 2021 2022 2023 2024 2025 2026 2027  EUR 2,545.1 mn short- and long-term Lines of credit Ratings debt as of September 30, 2021  Undrawn committed  S&P: BBB+ (stable 

  36. Slide 36: Appendix: Reconciliation of Free Cash Flow

    Appendix 3 Reconciliation of Free Cash Flow 36

  37. Slide 37: 1-9M 2021: Reconciliation free cash flow

    1-9M 2021: Reconciliation free cash flow 1-9 M 2021 1-9 M 2020 % change FCF after social plans new 465.4 429.2 8.4% Social plans new funded 65.1 77.4 -15.9% Total social plans paid* -73.5 -74.3 -1.1% FCF - previously reported 457.0 432.3 5.7% *In the previous view all payments for all social plans (

  38. Slide 38: Appendix: Regulatory Topics

    Appendix 4 Regulatory Topics 38

  39. Slide 39: Mobile Termination Rates

    Mobile Termination Rates Jan Jul Jan Jul Jan Mar Jan April Aug Jul Jan 2016 2016 2017 2017 2018 2019 2020 2020 2020 2021**** 2022 Austria (EUR) 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.008049 0.007 0.0055 Bulgaria (BGN) 0.019 0.019 0.014 0.014 0.014 0.014 0.014 0.014

  40. Slide 40: Upcoming spectrum tenders/prolongations/assignments

    Upcoming spectrum tenders/prolongations/assignments* Expected Comments The NRA has launched a consultation on a new “Spectrum Release Plan for Austria” over summer Austria 2022/2023 (26 GHz) 2021. Bulgaria 2022/2023 (700, 800 MHz) No further information yet. Frequencies are still occupied. Croatia 2

  41. Slide 41: EU roaming price regulation

    EU roaming price regulation RETAIL (in EURc) July 2014 April 30, 2016 June 15, 2017 Data (per MB) 20 domestic tariff + 5* domestic tariff Voice-calls made 19 domestic tariff + 5* domestic tariff (per minute) Voice-calls received 5 weighted average MTR 0 (per minute) SMS (per SMS) 6 domestic tariff +

  42. Slide 42: Appendix: Personnel restructuring in Austria

    Appendix 5 Personnel restructuring in Austria 42

  43. Slide 43: Quarterly Overview: Restructuring charges and provision vs. FTE

    Quarterly Overview: Restructuring charges and provision vs. FTE Overview restructuring charges FTEs addressed (in EUR million) 2015 2016 2017 2018 2019 2020 Q1 21 Q2 21 Q3 21 2015 2016 2017 2018 2019 2020 Q1 21 Q2 21 Q3 21 FTE reduction 69.5 95.0 9.1 70.1 100.2 91.3 24.3 23.5 22.4 Transfer to govern

  44. Slide 44: End of Presentation

    V / VZ End of Presentation 7 Al

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